In Summary
- Zimbabwe has the highest central bank interest rate in Africa at 35%.
- The Central Bank of Nigeria (CBN) follows with a benchmark lending rate of 27.5% as of February 2025.
- Experts anticipate possible rate reductions later this year, likely starting in the second half, with cuts projected by the close of 2025.
Deep dive!!
The central bank interest rates across Africa show a significant disparity, serving as essential instruments for monetary authorities working to stabilize economies, manage inflation, and attract foreign investments. For instance, the Reserve Bank of Zimbabwe upholds the highest rate in Africa at 35%, established to stabilize inflation expectations and bolster the newly launched gold-backed currency, the ZiG.
As the year progresses, numerous African countries will continue to face challenges such as inflation, currency instability, and fiscal deficits, leading central banks to either sustain or modify high benchmark interest rates. The Central Bank of Nigeria maintained its benchmark lending rate at 27.5% in February 2025, a decision that aligned with market predictions following six continuous hikes. Nonetheless, a report from Focus Economics suggests that there may be a rate easing later in the year, perhaps beginning in the second half, with potential reductions estimated at around 225 basis points by the end of 2025.
Countries like Senegal and Togo also maintain fixed interest rates; Senegal’s is projected to be 5.50% by the end of the quarter, while Togo has averaged 4.25% since 2010. Additionally, the Central Bank of West African States (BCEAO) is expected to lower interest rates in 2025 as inflation aligns with their targets, and the South African Reserve Bank (SARB) is likely to follow suit.
Below is a detailed examination of the ten African countries with the highest central bank interest rates as of 2025, along with essential insights into their economies, GDP, and the broader implications of these monetary policies.
Here are the Top 10 African Countries with the Highest Central Bank Interest Rates in 2025. Check them out!
10. Mozambique – 16.50%
Mozambique’s central bank lowered its interest rate to 16.5% in January 2024 due to a decline in inflation from 9.9% in February 2023 to 4.0% in February 2024. The rate cut is aimed at boosting economic growth while maintaining price stability.
- Economy: Recovering from conflict, with notable developments in the gas and mining industries. Agriculture and energy exports are vital.
- Population: ~33 million
- GDP (2024 est.): $18.4 billion
- Impact: The lower interest rate signals effective disinflation and stimulates growth in trade and services, improving credit accessibility for exporters and small businesses.
9. Sierra Leone – 19.25%
Sierra Leone’s central bank holds its interest rate at 19.25% to manage inflation and encourage economic stability. This rate reflects ongoing efforts to keep prices in check and foster investment.
- Economy: Rich in minerals but faces economic vulnerabilities. Agriculture and mining are dominant; however, infrastructure and governance challenges are significant.
- Population: ~8.5 million
- GDP (2024 est.): $5.2 billion
- Impact: While the stringent monetary policy aids in controlling inflation, it hampers bank lending. Small and medium enterprises struggle to grow, leading to an expansion in the informal sector as formal borrowing becomes more costly.
8. Angola – 19.00%
In March 2024, Angola’s central bank raised its benchmark interest rate to 19%, up from 18%, due to a 24% inflation rate in February 2024. This increase aims to counteract currency devaluation and rising fuel prices after subsidy removals.
- Economy: Heavily reliant on oil but making strides to diversify into agriculture, mining, and telecommunications.
- Population: ~36 million
- GDP (2024 est.): $90 billion
- Impact: Elevated rates help control inflation from fuel subsidy removals but also curtail consumer spending. This slows domestic production and diminishes purchasing power, impacting commerce.
7. Congo (Brazzaville) – 25.00%
The Republic of Congo’s central bank is set at a 25% interest rate to tackle inflationary trends and stabilize the national currency, one of the highest rates in the region reflecting considerable monetary tightening.
- Economy: Oil constitutes over 70% of GDP, with forestry and agriculture also playing roles.
- Population: ~6 million
- GDP (2024 est.): $14.8 billion
- Impact: While this helps to curb inflation, the high rate restricts borrowing for private businesses. Limited access to capital constrains trade, innovation, and job creation.
6. Sudan – 27.30%
Sudan’s central bank has a high interest rate of 27.3% to combat hyperinflation and stabilize the national currency, reflecting ongoing economic difficulties and attempts to restore stability.
- Economy: Affected by conflict and oil dependency, with agriculture and livestock being crucial sectors, although sanctions and civil unrest hinder growth.
- Population: ~45 million
- GDP (2024 est.): $31 billion
- Impact: The extremely elevated rate is a reaction to economic instability and currency depreciation, severely limiting domestic lending and discouraging business activity.
5. Egypt – 25.00%
As of April 2025, Egypt’s central bank has decreased the overnight deposit rate to 25%, the first cut in over five years. This decision follows a significant reduction in annual headline inflation, dropping from a peak of 38% in September 2023 to 13.6% in March 2025, indicating successful monetary tightening and improved economic conditions.
- Economy: Diverse, with solid tourism, agriculture, industry, and remittances; a key geopolitical player in North Africa.
- Population: ~112 million
- GDP (2024 est.): $387 billion
- Impact: The lower rate reflects positive inflation trends, likely boosting investment and consumption, supporting fiscal reforms, and potentially encouraging industrial growth and exports.
4. Malawi – 26.00%
Due to sustained inflation reaching 33.5% in February 2024, Malawi’s central bank raised its benchmark interest rate to 26% to stabilize prices and manage inflation expectations.
- Economy: Primarily agricultural, focusing on exports such as tobacco, tea, and sugar.
- Population: ~20 million
- GDP (2024 est.): $14 billion
- Impact: The central bank’s rate discourages credit growth but is essential for controlling soaring inflation. High borrowing costs hinder commercial activities, particularly for rural businesses.
3. Ghana – 27.00%
Since early 2024, Ghana’s central bank has sustained its policy rate at 27% despite inflation rising to 23.8% in December 2024. The Bank of Ghana is hopeful that forthcoming economic policies from the newly elected government will alleviate inflationary pressures.
- Economy: Abundant in resources, with key exports in gold, cocoa, and oil. Recently, the
- Completed an IMF-backed economic reform initiative.
- Population: Approximately 33 million
- GDP (2024 estimate): $74 billion
- Impact: High interest rates help lower inflation but can lead to increased loan defaults and hinder the growth of new businesses. This makes the financial landscape more challenging, especially for startups and manufacturers.
2. Nigeria – 27.50%
To tackle rising inflation, which hit 33.8% in October 2024, the Central Bank of Nigeria elevated its benchmark interest rate to 27.5% in November 2024. This strategy aims to alleviate inflationary stress and stabilize the naira amid economic difficulties.
- Economy: The largest economy in Africa, with a strong dependence on oil exports. It is also witnessing growth in the digital sector and has an active informal economy.
- Population: Approximately 223 million
- GDP (2024 estimate): $477 billion
- Impact: This increase in interest rates tightens the money supply in the banking sector, discouraging borrowing and potentially slowing down economic growth. Conversely, it might draw foreign investment in bonds and help stabilize the naira in the short term.
1. Zimbabwe – 35.00%
Zimbabwe maintains the highest central bank interest rate in Africa at 35%. The Reserve Bank of Zimbabwe keeps this rate in place to manage inflation expectations and to support the newly launched gold-backed currency, the ZiG. Despite a significant devaluation in September 2024, the ZiG appreciated by 12.7% against the US dollar in November, suggesting some stabilization.
- Economy: The economy of Zimbabwe is primarily based on agriculture, with emerging sectors in mining and manufacturing. The nation has struggled with hyperinflation for many years.
- Population: Approximately 16 million
- GDP (2024 estimate): $21 billion
- Impact: The high-interest rate helps control inflation but limits access to affordable credit for small and medium enterprises (SMEs) and consumers. Reduced liquidity negatively affects trade, hindering investment in productive sectors.
Conclusion
The elevated interest rates in these African countries illustrate ongoing attempts by central banks to manage inflation, stabilize currencies, and promote economic growth. While some nations have started to ease their monetary policies due to falling inflation rates, others continue to uphold high rates to confront enduring economic issues. These financial measures significantly influence trade, business operations, and overall economic confidence. Keeping an eye on these developments is vital for investors, policymakers, and other stakeholders engaged in the evolving economic landscape of Africa.
