Inflation across African economies is beginning to moderate after several years of sharp price increases, though food costs and currency pressures continue to pose risks to households and policymakers, according to a report by the African Export-Import Bank.
Price growth has started to slow in several countries as global energy and commodity prices stabilize and central banks maintain tight monetary policies, the lender said in its February assessment of macroeconomic developments across the continent. The easing follows a period of intense inflation triggered by pandemic-era supply disruptions, rising energy costs and currency depreciation that pushed consumer prices to multi-year highs in many African economies.
Despite the improvement, food inflation remains a major concern because of climate-related shocks, supply constraints and the continent’s heavy reliance on imported food products, the report said. These factors continue to erode household purchasing power and complicate efforts by policymakers to bring overall inflation down.
Currency volatility has also contributed to persistent price pressures in several frontier markets, particularly where depreciation has increased the cost of imports ranging from fuel to basic consumer goods.
Central banks across the continent have responded with aggressive interest rate increases over the past two years in an effort to anchor inflation expectations and stabilize exchange rates. While tighter policy is helping moderate price growth, it has also raised borrowing costs for businesses and governments.
The report said inflation dynamics remain uneven across Africa, reflecting differences in exchange rate stability, fiscal conditions and the structure of domestic food production. Countries with stronger agricultural output and more stable currencies have seen faster disinflation, while economies facing foreign exchange shortages or weather-related disruptions continue to experience elevated food prices.
The lender said sustained declines in global commodity prices and improved agricultural production could help further reduce inflation pressures, though weather variability and global market volatility remain significant risks.
