NEWS & POLITICS
African Central Banks move toward interest rate cuts as inflation eases across the continent
Central banks across Africa are preparing to cut interest rates in a bid to stimulate economic growth and attract new investment, following months of easing inflation and stabilizing prices.
Michael Oduor
CENTRAL AFRICA, 17 Nov 2025 (Running Africa) — The shift comes after a prolonged period of record-high commodity costs and service expenses that pushed many African economies into aggressive monetary tightening cycles.
Inflation Cools, Paving the Way for Monetary Policy Adjustments
Nigeria and Egypt, two of the continent’s largest economies, currently maintain some of the highest benchmark rates globally at 27.50% and 27.25%, with policymakers signaling that reductions are on the horizon as inflation begins to soften.
Kenya and South Africa have already moved ahead, lowering their interest rates to 10.75% and 7.50% respectively. South Africa’s rate cut followed a significant drop in inflation to 3.0% in December 2024. The South African Reserve Bank’s Monetary Policy Committee is expected to cut rates again in November to guide inflation toward its new 3% target, a move aimed at lowering transition costs and supporting fiscal stability.
In Kenya, cooling price pressures led to a rate cut to 10.75% earlier in the year. However, inflation climbed to 4.6% in October 2025, its highest level since mid-2024, still within the Central Bank of Kenya’s target range of 2.5% to 7.5%.
Namibia also eased monetary policy, announcing a 25-basis-point rate cut as inflation tapered to 3.2% in January 2025.
Improved Outlook for Sub-Saharan Economies
The World Bank has upgraded Sub-Saharan Africa’s economic growth forecast to 3.8%, citing stronger foreign exchange positions, improving macroeconomic stability, and moderating prices. Regional inflation continues to trend downward, cooling to 2.47%, a notable shift compared to developed economies still battling persistent inflationary pressures.
Despite this progress, inflation in several African countries remains high, averaging 18.6%, well above most central bank targets. Still, the continent’s overall economic performance shows resilience: Africa’s GDP grew by 3.2% in 2024, slightly higher than the 3.0% recorded in 2023, according to the African Development Bank.
