By Atoyebi Nike
Ghana and Egypt led Africa’s most aggressive interest-rate cuts in 2025 as inflation eased and economic conditions improved across the continent.
After years of tight monetary policy to combat inflation triggered by currency shocks, supply disruptions and fiscal stress, African central banks began shifting toward growth support.
Inflation slowed sharply. Excluding Algeria, the nine largest African economies recorded average inflation of 10.74 per cent in 2025, down from 16.28 per cent in 2024, according to Trading Economics and World Bank data. The World Bank said most sub-Saharan African central banks either cut rates or paused tightening, though global risks remain.
Economic growth also strengthened. Africa’s GDP growth is projected to rise to 3.8 per cent in 2025 from 3.5 per cent in 2024, with further acceleration expected in 2026 and 2027.
Ghana recorded the deepest easing. The Bank of Ghana cut its policy rate by 1,000 basis points to 18 per cent between January and November. Inflation fell to 6.3 per cent, while the cedi gained 26 per cent, supported by debt restructuring and strong gold inflows.
Egypt followed with cumulative rate cuts of 725 basis points, reducing its benchmark to 20 per cent. Inflation slowed to 12.3 per cent in November, allowing policymakers to refocus on investment and domestic growth under its IMF-backed reform programme.
Kenya cut rates by 175 basis points to 9 per cent as inflation stayed within target and the shilling remained stable. South Africa eased more cautiously, cutting rates by 100 basis points to 6.75 per cent amid weak demand and easing price pressures.
Nigeria joined the easing cycle in September, cutting its policy rate by 50 basis points to 27 per cent , its first reduction in five years after inflation slowed. Namibia, Tanzania and Algeria also made modest cuts as price pressures softened.
