Several African countries continue to grapple with high inflation, rising unemployment, and ongoing monetary and fiscal policy adjustments, prompting many central banks across the continent to revise interest rates in the first months of 2025.
In its April 2025 World Economic Outlook, the International Monetary Fund (IMF) downgraded economic growth forecasts for most African nations excluding Eswatini (formerly known as Swaziland), citing “lower external demand, subdued commodity prices, and tighter financial conditions,” with the most significant downgrades affecting commodity-exporting nations and those with strong trade ties to the United States.
Countries such as Egypt, South Africa, Kenya, Mozambique, Eswatini, and Lesotho have responded by lowering interest rates.
In contrast, others, including Nigeria, Zambia, Angola, and Ghana, have held rates steady but may begin easing in the second half of the year as inflationary pressures begin to subside.
Across Europe, interest rates remain elevated: Ukraine stands at 15.5%, Russia at 21%, and Turkey at 46%. Conversely, developed economies maintain relatively moderate rates. In the United States, rates range from 4.25% to 4.5%, while Canada’s benchmark rate is at 2.75%.
In Nigeria, following the 300th Monetary Policy Committee (MPC) meeting in May 2025, the Central Bank of Nigeria (CBN) retained the Monetary Policy Rate (MPR) at 27.5%, making it the country with the third-highest interest rate in Africa this year.
Here is a breakdown of the top 10 African countries with the highest interest rates in 2025:
10. Gambia – 17%
The Central Bank of The Gambia (CBG) has been on an unwavering mission to bring down inflation, a key risk to economic growth. For this reason, the bank has maintained its policy rate at 17% since September 2023. The bank retained this policy rate again at its Monetary Policy Committee (MPC) meeting in February 2025.
9. Liberia – 17.25%
As of January 24, 2025, the Central Bank of Liberia (CBL) maintained its MPR at 17.25%, citing concerns over rising consumer prices and slowing GDP growth. The reserve requirement ratios remained at 25% for Liberian dollar deposits and 10% for U.S. dollar deposits. Gross International Reserves grew by 10.4% to $526 million, increasing import cover to 3.6 months.
The country’s banking industry capital adequacy ratio grew to 31.5 per cent, 21.5 percentage points above the regulatory limit of 10.0 per cent, according to the CBL.
8. Angola – 19.5
The Banco Nacional de Angola (BNA) held its key rate at 19.5% in January 2025, while reducing its liquidity absorption rate to 17.5% and easing the reserve requirement to 20%.
Annual inflation eased slightly to 27.5% in December 2024 as the kwanza stabilized. Despite this, BNA Governor Manuel Tiago Dias emphasized caution in monetary policy to balance growth and price stability.
7. Sierra Leone – 24.75%
In October 2024, the Bank of Sierra Leone increased its benchmark rate by 50 basis points to 24.75% to tackle inflation.
Headline inflation dropped to 25.49% in August 2024, a 29.1% decline over ten months, driven by lower food and non-food prices.
6. Democratic Republic of the Congo – 25%
The Central Bank of the Congo (BCC) kept its policy rate at 25% since November 2024, seeking to curb inflation and stabilize the franc amidst conflict in the eastern region. Despite 2023’s robust 8.4% GDP growth, inflation reached 23.8% in December 2023 due to budget pressures and imported inflation.
5. Egypt – 25.5%
In April 2025, Central Bank of Egypt cut its rate by 225 basis points to 25.5%, the first easing move since 2020. Headline inflation dropped to 13.6%, and core inflation to 9.4%, reflecting past monetary tightening. While growth has resumed, inflation remains above target, prompting continued policy vigilance.
“The sharp decline in annual headline inflation” in 1Q 2025 created “ample room for commencing the easing cycle,” the MPC said, noting that inflation during the quarter dropped by nearly 9 percentage points.
4. Malawi – 26%
On May 8, 2025, the Reserve Bank of Malawi (RBM) kept its policy rate unchanged at 26%, citing persistent inflation, still above 30%, driven by forex shortages and weak agricultural output. The bank flagged rapid money supply growth as a policy concern, despite expectations for inflation to ease later in the year.
Mark Lungu, Director of Economic Policy and Research at RBM, said that maintaining the current rate is meant to preserve stability in the cost of borrowing, which directly affects households and businesses.
“The policy rate and other monetary policy variables have been maintained but will be under observation going forward. This means the cost of borrowing remains the same, which is to the advantage of ordinary citizens,” Lungu said.
He also noted that inflation has improved significantly, falling from 48 per cent to 33.9 per cent, largely due to better fiscal discipline and promising harvest projections.
“We are seeing deceleration in maize prices, which strengthens the positive inflation outlook and contributes to overall price stability in the third quarter,” Lungu said, while urging the government to enhance domestic revenue generation and curtail public spending.
3. Nigeria – 27.5%
Nigeria’s CBN retained its MPR at 27.5% during its landmark 300th MPC meeting. Key monetary indicators include:
- Asymmetric Corridor: +500/-100 basis points
- Cash Reserve Ratio (CRR): 50% for deposit money banks, 16% for merchant banks
- Liquidity Ratio: 30%
All 12 committee members voted to hold the rate, citing inflation’s decline to 23.71% in April 2025 from 24.23% in March, according to the National Bureau of Statistics (NBS).
2. Ghana – 28%
In March 2025, the Bank of Ghana raised its rate by 100 basis points to 28% under new Governor Dr. Johnson Asiama. Despite a gradual disinflation trend, the central bank stressed that inflation risks remain high and reaffirmed its commitment to price stability, even at the expense of near-term economic growth.
1. Zimbabwe – 35%
Zimbabwe tops the chart with a 35% benchmark rate. The Reserve Bank of Zimbabwe (RBZ) kept the rate unchanged in March 2025 to anchor inflation and stabilize its gold-backed ZiG currency.
Despite weak demand, the RBZ prioritized price control amid fears of resurging inflation, driven by structural vulnerabilities and currency volatility. The rate was set following a 43% devaluation of the ZiG in late 2024.
With several African economies battling inflation and external shocks, central banks across the continent are adopting stringent monetary policies.
While such high interest rates help curb inflation and support currencies, they also pose challenges to private investment and economic growth. Nigeria’s 27.5% rate reflects a cautious approach in balancing these competing objectives, as it ranks 3rd among Africa’s highest.
