Lagos, Nigeria - July 05, 2024

Inflation rates in major sub-Saharan African economies are expected to remain above central bank targets for the foreseeable future. Despite aggressive interest rate hikes over the past two years, ranging from 450 basis points in Zambia to a hefty 1,275 basis points in Nigeria, inflationary pressures remain strong.

The median forecast from a recent survey conducted between July 17 and 24 indicates that countries such as Angola, Ghana and Nigeria will not see inflation return to the desired target bands any time soon. Nigeria, Africa's largest economy, is forecast to see a slight decline in inflation to an average of 19.9% next year, down from 30.3% this year, but still significantly above the central bank's target of 6%-9%.

Earlier this week, the Nigerian central bank raised its benchmark interest rate by 50 basis points to 26.75%. In June, Nigeria's inflation rate stood at 34.19%, and Ghana's at 22.8%. Ghanaian inflation is forecast to average 13.1% next year, down from 21.1% this year, but still above the Bank of Ghana's target of 8%, with a margin of error of plus or minus 2 percentage points.

Ghana is expected to end the year with interest rates 200 basis points lower, starting with a 50 basis point cut in its main rate to 28.50% on Monday.

SHOTLIST
1. various from Lagos, Nigeria.