State of rates in Africa

Africa’s largest economies to make changes for first time in years.

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Central banks in two of Africa’s largest economies – South Africa and Nigeria – are set to change course on interest rates for the first time in years as inflation lets up. At least five others including Moroc

co’s and Ghana’s are poised to follow suit in adjusting their policy levers lower, with many seen undertaking small interest-rate cuts to anchor inflation expectations.

Angola is set to be among those that will join Nigeria, which has raised interest rates since May 2022, in keeping policy stances unchanged.

“African central banks will continue to make monetary policy decisions with one eye on the exchange rate,” said Citi chief Africa economist David Cowan.

“This will result in a cautious rate cycle across Africa for the rest of 2024 and into 2025, with central banks prepared to continue to run quite significantly real positive policy rates to limit currency depreciation.”