Interest rates are an important part of every economy, influencing everything from consumer spending to business investment. Several African countries are facing inflationary pressures, requiring central banks to boost interest rates to ensure economic stability. Countries such as Egypt, Nigeria, and Malawi are leading the pack, with African central banks adopting a hawkish posture due to high inflation rates and quickly decreasing currencies.
For example, increasing inflation in Nigeria, which reached 31.7% in February 2024, prompted the Central Bank of Nigeria (CBN) to raise the monetary policy rate, or benchmark interest rate, by 600 basis points to 24.75% in March 2024. Similarly, the Egyptian Central Bank hiked the country’s interest rate by 600 basis points to 27.25% this year in response to inflationary concerns.
Here are the African countries with the highest interest rates, according to available statistics. These rates reflect the economic issues that these countries face, as well as their efforts to control inflation and stabilize economies.
1. Ghana
Ghana is experiencing one of the greatest economic crises in recent history. In January 2024, the Bank of Ghana lowered its interest rate by 100 basis points to 29.00 percent. In January 2024, the country’s inflation rate fell to 23.5% from 52.8% in February 2023. However, in March 2024, Ghana’s inflation rate returned to 25.8%.
2. Egypt
Egypt is in a convoluted economic maze, with inflation forcing the central bank to raise its benchmark interest rate to a startling 27.25%. This move tries to attract investment and stabilize the country’s currency during a foreign currency crisis.
3. Malawi
Malawi’s central bank has taken a dramatic move by boosting its key interest rate to 26.00% in an effort to contain inflation. With a current inflation rate of 33.5%, this decision underlines the country’s commitment to maintaining economic stability.
4. Nigeria
Nigeria’s economic narrative is distinguished by a succession of interest rate hikes, the most recent raising the rate to 24.75%. These measures are in reaction to ongoing inflationary pressures and the desire for exchange rate stability.
5. Angola
Faced with a 24% inflation rate, Angola’s central bank raised its benchmark interest rate to 19.00%. This is part of a broader monetary tightening cycle aimed at combating inflation caused by currency devaluation and rising fuel prices.
6. Gambia
The Gambia’s central bank has kept its monetary rate at 17.00% in an effort to control inflation, which reached at 16.2% in January 2024.
7. Mozambique
Mozambique’s central bank reduced interest rates to 16.50% as inflation eased. This move represents a strategic shift in the country’s monetary strategy.
8. Kenya
Kenya’s central bank has held the interest rate steady at 13.00%, indicating confidence in the country’s inflation management, which is on track to meet its objective of 5.0%.
9. Zambia
Zambia’s monetary policy rate has been raised to 12.50%, as part of a strategy to steer the country toward its 6-8% inflation target.
10. Uganda
Uganda’s central bank has raised interest rates to 10.25%, reflecting continuous attempts to keep inflation within the target range of 5%.
