2025 in review: How inflation shaped Africa’s biggest markets

Across many parts of Africa, headline inflation has moderated in 2025, following the highs of 2023–2024. Tighter monetary policies, stabilising food and energy prices, and relatively stable currencies have helped ease price pressures.

A BusinessDay analysis of Africa’s 10 biggest economies, based on World Bank data, shows that Morocco recorded the lowest average inflation from January to October at 0.94 percent, followed by South Africa at 3.15 percent.

Among the other top 10 economies, average inflation from January to November stood at 3.3 percent in Tanzania, 4.04 percent in Kenya, and 13.6 percent in Ethiopia. Further down the list were Egypt (14.4 percent), Ghana (15.4 percent), Angola (20.8 percent), and Nigeria (20.96 percent), Africa’s most populous nation.

Read also: What to do as inflation impacts your savings

Notably, Algeria registered negative inflation of -0.40 percent in October, the first time in at least a decade.

On average, excluding Algeria, the nine countries posted a total average inflation rate of 10.74 percent in 2025, down from 16.28 percent in 2024 and 15.57 percent in 2023. Following a trough in 2023, regional economic activity is expected to expand by 3.8 percent in 2025, up from 3.5 percent in 2024, and accelerate to an average of 4.4 percent in 2026–27, according to the World Bank’s latest Africa Pulse report.

“Consumer price inflation has continued to recede across most sub-Saharan African countries, albeit at varying speeds,” the report said. “The projected acceleration in growth in 2025 is underpinned by improved terms of trade across much of the region, contributing to currency stabilisation and, in some cases, appreciation.”

The multilateral lender noted that declining inflation has allowed for a gradual easing of monetary policy, boosting household purchasing power and creating space for further rate cuts. “These favourable conditions are fueling a recovery in private consumption and investment. However, ongoing fiscal consolidation may moderate the pace of recovery in some economies,” it added.

Low-inflation countries

Morocco – 0.94 percent

Morocco recorded the continent’s lowest inflation in 2025. After peaking at 6.7 percent in 2022 and 6.08 percent in 2023 due to food and global price shocks. Inflation eased to around one percent in 2024 and remained subdued this year.

Lower food prices, easing imported inflation, and declining core inflation have limited underlying price pressures. Bank Al-Maghrib has kept its policy rate at 2.25 percent, focusing on supporting growth rather than fighting inflation. The central bank plans to adopt an inflation-targeting framework from January 2027.

South Africa – 3.15 percent

South Africa’s inflation has remained within the Reserve Bank’s three percent to six percent target range. Early-year declines were driven by lower fuel prices, easing food inflation, and subdued domestic demand.

Last month, the country’s central bank reduced its benchmark repo rate by 25 basis points to 6.75 percent at its meeting, the sixth cut in the easing cycle, reflecting an improved inflation outlook. Its 30 percent US tariffs and trade tensions have had a limited impact on consumer prices.

Read also: Nigeria inflation ease to 14.45% in November

Tanzania – 3.33 percent

Tanzania’s inflation rose from 3.1 percent in 2024 to 3.33 percent in 2025. The East African nation’s long-standing economic stability was tested by post-election unrest in October, which disrupted investment and tourism.

In October, the Bank of Tanzania maintained its benchmark interest rate at 5.75 percent, expecting inflation to remain within the target range of three percent to five percent while supporting robust growth.

Kenya – 4.04 percent

Inflation in Kenya has been moderate, averaging 4.04 percent, driven by food, transport, and housing costs. The Central Bank of Kenya reduced its benchmark lending rate to nine percent in December 2025, marking the ninth consecutive cut.

The easing reflects confidence in manageable inflation and aims to stimulate lending and economic activity while maintaining exchange rate stability.

Moderate- to high-inflation countries

Ethiopia – 13.6 percent

Ethiopia continues to experience high inflation, though it has eased to 13.6 percent from 30.2 percent in 2023 and 21 percent in 2024. Food inflation remains the primary driver, reflecting fluctuations in agricultural output, climate shocks, logistical bottlenecks, and insecurity.

Exchange rate pressures, foreign exchange shortages, and monetary expansion have also contributed to imported inflation. A recent World Bank report ranked Ethiopia, alongside South Sudan, as having one of Africa’s weakest-performing currencies in the first eight months of 2025, citing declining export revenues, limited foreign exchange inflows, and persistent macroeconomic pressures.

Ongoing economic reforms and improved harvest conditions have helped moderate price pressures, but structural constraints continue to limit the pace of disinflation.

Egypt – 14.4 percent

Egypt’s urban inflation has fallen to 14.4 percent from 28.3 percent in 2024, following the 2023 currency devaluation and International Monetary Fund (IMF)-supported reforms. Tight monetary policy and floating the pound helped to stabilise the economy.

Inflation dropped to 12.8 percent in February, the lowest in almost three years. The Central Bank of Egypt gradually reduced its overnight deposit rate from 27.25 percent to 21 percent between April and October while maintaining price control.

Read also: At 14.45%, Nigeria’s inflation falls below budget estimate for first time in 6yrs

Nigeria – 14.45 percent

Headline inflation slowed for an eighth straight month to 14.45 percent in November, down from 16.1 percent in October, according to data released Monday by the National Bureau of Statistics (NBS). The reading came in slightly below the median estimate of economists surveyed by BusinessDay, underscoring the pace at which price pressures have eased since the start of the year.

The slowing inflation trend strengthens the case for a rate cut at the Central Bank of Nigeria (CBN)’s monetary policy meeting next February, bringing much needed relief to businesses choked by high interest rates. The Monetary Policy Committee (MPC) left the benchmark interest rate unchanged at 27 percent at its last meeting but has signalled plans to begin an easing cycle as inflation continues to decelerate.

Ghana – 15.4 percent

Ghana’s inflation has declined to 15.4 percent from 21 percent in 2024 and 30.2 percent in 2023, supported by a strong cedi, digital economy growth, as well as cocoa and gold exports.

The Bank of Ghana cut its benchmark rate by 350 basis points to 18 percent in November, reflecting sustained disinflation and stronger external buffers. The currency’s strength helped headline inflation enter a single-digit inflation rate of 9.4 percent in September, the first time since August 2021.

High-inflation countries

Angola – 20.8 percent

Inflation in Angola has remained elevated, though lower than the extreme 28.2 percent seen in 2024. Food and energy prices continue to exert pressure, compounded by currency volatility and import dependence.

The National Bank of Angola has gradually eased the key interest rate to 18.5 percent in November, balancing the need for growth with price stability.

Read also: Nigeria manufacturing grows 1.25% in Q3 amid easing inflationary pressure

Notable case: Algeria – Deflation at -0.40 percent

Algeria stands out for its negative inflation, with the CPI declining in certain months, reflecting rare deflationary pressures.

In June 2025, the CPI fell 0.22 percent year-on-year, the first negative reading in at least a decade, highlighting weak demand and subdued price pressures in key sectors.

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