2016 was a tumultuous year. Globally, the ambiguity in the run-up to the UK's "Brexit" vote and the US election, as well as the contrarian outcomes, drove uncertainty and volatility. During the year, China’s policy stimulus continued and growth stabilised, providing some support to commodity prices, while OPEC's decision to trim output helped to lift oil prices.
In sub-Saharan Africa, widespread drought in east, central and southern Africa continued, which placed strain on food supply and drove inflation. Oil-export reliant countries remained constrained on the back of low prices, and many countries tightened monetary policy in an attempt to control inflation. Despite these headwinds, the more diversified oil-importing east African countries continued to offer better macro prospects, attract investment and outperform.
In South Africa, the threat of a sovereign downgrade by rating agencies to sub-investment grade persisted throughout the year. This in turn negatively impacted the already weak business and consumer confidence and further delayed much needed domestic investment and job creation opportunities. Politically driven actions added to uncertainty and heightened international investor caution. Inflationary pressures brought about by the drought and the weak exchange rate placed additional pressure on already constrained consumers.