Central banks in five African countries are likely to raise interest rates in the coming weeks in a bid to rein in inflation including Ghana and South Africa, while seven countries including Nigeria are expected to keep borrowing costs on hold as the impact of Russia-Ukraine is assessed, Bloomberg reported.
The U.S Federal Reserve on Wednesday, March 16 raised interest rates for the first time in three years. This rate increase coupled with the uncertainty of the ongoing war in Ukraine will be the focal point of African monetary authorities as they meet.
Possible actions by the central banks according to Bloomberg survey
The Bank of Ghana is expected to hike its key interest rate on March 21 to control the decline in cedi and inflation at a six-year high. Ghana’s policy rate is currently at 14.5%, with the inflation rate at 15.7% in February.
On March 22, Nigeria, with a policy rate of 11.5% and an inflation rate of 15.7% in February, is expected to leave rates unchanged. Nigeria’s economy grew 3.4% last year, having contracted 1.92% in 2020. The CBN Governor Godwin Emefiele had said that he would only raise interest rates once the country is on a sustainable recovery path.
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Other countries that are expected to raise interest rates are Morocco with an interest rate of 1.5% inflation rate of 3.1% in January; South Africa with a repurchase rate of 4% and an inflation rate of 5.7% in January; Egypt with a deposit rate of 8.25% and an inflation rate of 8.8% in February; Zimbabwe with a policy rate of 60% and inflation rate 66.1% in February; Namibia with repurchase rate of 4% and an inflation rate of 4.5% in February.
Other countries that are expected to leave rates unchanged are Kenya with a central bank rate of 7% and an inflation rate of 5.1%; Seychelles with a policy rate of 2% and an inflation rate of 2.98% in February; Mozambique with a MIMO interbank rate of 13.25% and an inflation rate of 6.8% in February; Angola with a BNA rate at 20% and inflation rate at 27.3% in February; Uganda with a central bank rate of 6.5% and an inflation rate of 3.2% in February.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
