African Central Banks Respond to Inflation with Interest Rate Hikes

Taiwo Ajayi
3 Min Read

Several African countries are contending with inflationary pressures, leading their central banks to implement rate hikes.

Countries such as Egypt, Nigeria, and Malawi are at the forefront, responding to soaring inflation rates and currency depreciation with a hawkish monetary stance.

Nigeria: The Central Bank of Nigeria (CBN) raised its monetary policy rate by 600 basis points to 24.75% in March 2024, in response to escalating inflation, which reached 31.7% in February 2024.

Egypt: The Egyptian Central Bank increased the country’s interest rate by 600 bps to 27.25% this year due to inflationary pressures.


Uganda: The Bank of Uganda raised its interest rate to 10.25% in April 2024, despite a marginal decline in inflation from 3.4% to 3.3% in March 2024.

Zambia: The Bank of Zambia hiked the country’s monetary policy rate by 150 bps to 12.5% in February 2024 to steer towards a 6-8% inflation rate target.

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Kenya: The Central Bank of Kenya maintained its interest rate at 13.00% in April 2024, with the country’s inflation rate at 5.7% in March 2024, down from 6.31% in February 2024.

Mozambique: The Banco de Mocambique cut its interest rate from 17.25% to 16.50% in January 2024, following a decline in inflation from 9.9% in February 2023 to 4.0% in February 2024.

The Gambia: The Central Bank of the Gambia held its monetary rate at 17.00% in February 2024, with the country’s inflation rate at 16.2% in January 2024.

Angola: The Angolan Central Bank increased the benchmark interest rate to 19.00% in March 2024, from 18.00%, due to a 24% inflation rate in February 2024.

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Malawi: Malawi’s central bank raised its benchmark interest rate to 26.00% in February 2024, citing persistent inflationary pressures.

Ghana: The Bank of Ghana reduced its interest rate by 100 bps to 29.00% in January 2024, despite inflation easing to 23.5% in January 2024 from 52.8% in February 2023.

Despite the CBN’s efforts, Nigeria’s inflation remains high, projected to reach 32.63% in March 2024. This raises questions about the effectiveness of monetary policy measures in addressing inflation.

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