As global economic growth prospects improve, Africa is following suit. Inflationary pressures are easing, albeit unevenly, and GDP is gradually expanding. In Ghana, inflation has dropped to a two-year low of 21% (y/y), while real GDP growth surged to 6.9% (y/y) in Q2 2024, marking the fastest pace in five years. Kenya also experienced a slowdown in inflation, with September’s headline rate at 3.6% (y/y), steadying at the lower band of the Central Bank of Kenya’s (CBK) target of 3-8%. Meanwhile, in Nigeria, despite inflation slowing for the second consecutive month to 32.15% in August, risks persist, particularly after the recent 50% increase in petrol prices.
With inflation rates varying, interest rate decisions were also mixed across key African countries. In line with our expectations, South Africa and Ghana reduced interest rates by 25 and 200 basis points, respectively, while Egypt held its rate steady at 27.25%. Surprisingly, the Central
