Sub-Saharan Africa faces one of the most challenging economic environments in years, marked by a slow recovery from the pandemic, rising food and energy prices, and high levels of public debt. For a long time, inflation has been one of Africa’s most pressing challenges. And many of its countries, despite different measures, have been unable to stem the tide of gravity-defying inflation.
Although inflation figures and rates on the continent are in varying degrees, depending on the country and region, its sky-bound trajectory is a shared trend. Some countries, such as Zimbabwe and South Sudan, have experienced much higher inflation levels in recent years, with annual rates reaching several hundred or even thousands of per cent.
Similarly, while inflation does not have a uniform cause on the continent, many African countries have struggled with high inflation levels due to factors like political instability, poor economic policies, and external shocks. For example, in recent times, we have seen global events like the COVID-19 pandemic and the Russian-Ukraine war put inflationary pressure on the economies of the continent.
High inflation impedes economic growth, as it reduces the purchasing power of consumers, increases uncertainty for businesses, and reduces foreign investment.
Below are some African countries with the highest interest rate.
Zimbabwe (89.10 per cent)
Zimbabwe’s inflation rate remains one of the highest in the world. For several years, the inflation figures in the country have been worrisome. At the height of the country’s inflation from 2008 to 2009, it was difficult to measure Zimbabwe’s hyperinflation because the government stopped publishing inflation figures. Many economic observers argued it was meant to draw attention away from runaway inflation which has come to symbolise the country’s unprecedented economic meltdown.
The inflation rate in Zimbabwe averaged 89.10 per cent from 2009 until 2023, reaching an all-time high of 837.53 per cent in July 2020. An item that cost $100 in 1980 costs 345.81 billion dollars at the beginning of 2022.
Zimbabwe’s consumer price inflation eased to 92.3 per cent year-on-year in February 2023, down from the prior month’s 229.8 per cent. The annual inflation has been on a downside trend since September 2022 and reached its lowest level since March last year.
Sudan (63.3 per cent)
Before 1997, the inflation rate had spiked ridiculously. But the implementation of the International Monetary Fund reform program in 1997, along with monetary reforms of the central bank and declining prices of imported non-oil commodities and manufactured goods, slowed inflation to less than 47 per cent in that year, less than 20 per cent in 1998 and 1999, and to single digits by 2000.
By 2006, inflation was at 7.2 per cent. But the effect of global inflation pushed the rate of inflation in Sudan to an annual average of 11.2 per cent and 13 per cent in 2010. It has been on an upward trend since then.
In February 2023, the annual inflation rate in Sudan eased to 63.3 per cent from 83.6 per cent in the prior month. This was the softest reading since December 2019.
Ghana (53.6 per cent)
Recently, Ghana has been battling its worst economic crisis in a generation amidst a currency crisis that has worsened the nation’s fiscal position.
Ghana’s annual inflation rate eased for the second month to 52.8 per cent in February 2023, from 53.6 per cent in the prior month and after reaching a more than two-decade high of 54.1 per cent in December. Driven by skyrocketed prices of fuel, utilities and food, December’s inflation reading in the West African country is the highest since April 2001, when it was at 59.7 per cent.
The present slowdown reflects a stable cedi and falling international oil prices. Food-price growth eased for the first time in more than a year to 59.1 per cent in February from 61 per cent in the prior month, while non-food inflation was unchanged (at 47.9 per cent).
Sierra Leone (38.48 per cent)
By the latest official report from Statistics Sierra Leone, the inflation rate in Sierra Leone increased to 38.48 per cent in January from 37.09 per cent in Dec ember of 2022.
Per Statista, the average inflation rate of Sierra Leone was forecast to decrease between 2022 and 2027 by a total of 15.6 percentage points. The average inflation rate is estimated to amount to 10.3 per cent in 2027.
Ethiopia (32 per cent)
In May 2022, Ethiopia recorded general inflation of 37.2 per cent, one of the highest levels in recent years. Commendably, it decreased to 30.7 per cent in September but climbed upwards to reach 35.1 per cent in November last year.
However, In February 2023, the annual inflation rate in Ethiopia eased to 32 per cent, from 33.9 per cent in the prior month. The Covid-19 pandemic, the global impact of Russia’s invasion of Ukraine, and a prolonged drought in the southeast of Ethiopia continue to put pressure on the economy.