African central banks delivered nearly 1,000 basis points in interest-rate cuts in September, with Nigeria leading the easing cycle with a 350-basis-point reduction.
Nigeria, Zambia, Zimbabwe and Angola collectively reduced their benchmark interest rates by 950 basis points during the month, reflecting improving inflation conditions and, in some cases, greater exchange-rate stability.
The decisions highlight the different monetary-policy approaches across the continent as central banks respond to domestic inflation, economic growth, currency movements and external shocks.
Nigeria leads September easing
The Central Bank of Nigeria (CBN) delivered the largest rate reduction among African central banks in September, cutting its Monetary Policy Rate (MPR) by 350 basis points from 26.5 percent to 23 percent.
The reduction was the CBN’s largest single rate cut in at least two decades.
The decision came as inflation continued to moderate and foreign-exchange conditions improved, giving policymakers more room to reduce the degree of monetary tightening that had been maintained to contain price pressures and support currency stability.
Nigeria’s headline inflation eased slightly to 15.39 percent in August from 15.43 percent in July, while the country’s external reserves reached $55.25 billion in September.
Despite the reduction, Nigeria’s 23 percent policy rate remains among the highest on the continent.
The key issue now is whether the lower benchmark rate will translate into cheaper credit for businesses and consumers while maintaining recent improvements in inflation and exchange-rate stability.
Zambia follows with major cut
Zambia reduced its policy rate by 250 basis points to 10.75 percent, its lowest level since October 2023.
The decision came after inflation eased to 6.1 percent in September from 6.2 percent in August, moving closer to the Bank of Zambia’s target range of 6 to 8 percent.
It was the fourth consecutive rate cut by the central bank and was considerably larger than the 25-basis-point reduction economists had expected.
The improvement in inflation has given policymakers more room to lower borrowing costs and support economic activity while maintaining their price-stability objective.
Zimbabwe continues monetary easing
Zimbabwe also cut its benchmark interest rate by 250 basis points to 27.5 percent as the country continued its monetary-policy normalisation.
The Reserve Bank of Zimbabwe had already reduced the rate by 500 basis points in June, bringing total cuts since then to 750 basis points.
Annual ZiG inflation increased to 3.7 percent in September from 2.9 percent in August, while monthly inflation averaged 0.4 percent between January and September.
Despite the latest reduction, Zimbabwe still has one of Africa’s highest policy rates.
The country’s easing cycle follows improvements in its inflation and currency conditions, with policymakers seeking to support economic growth while maintaining price stability.
Angola extends rate-cutting cycle
Angola continued its monetary-easing programme with a 100-basis-point reduction, bringing its policy rate to 14.75 percent.
It was the third consecutive rate cut by the National Bank of Angola.
The reductions have been supported by falling inflation, giving the central bank greater room to gradually lower borrowing costs while monitoring price stability.
Compared with Nigeria, Zambia and Zimbabwe, Angola’s easing has been more gradual.
South Africa moves in the opposite direction
South Africa was the major exception to September’s easing trend, raising its policy rate by 25 basis points to 7.25 percent.
It was the second rate increase by the South African Reserve Bank this year.
The central bank cited renewed inflation risks, including higher fuel prices and broader global supply pressures.
The decision contrasted with the rate cuts in Nigeria, Zambia, Zimbabwe and Angola, showing how different economic conditions are influencing monetary policy across the continent.
Other major economies hold rates
Ghana, Egypt, Morocco and Mozambique kept their benchmark interest rates unchanged in September as policymakers assessed inflation trends, economic growth and external risks.
Ghana maintained its policy rate at 14 percent, while Egypt kept its overnight deposit and lending rates at 19 percent and 20 percent respectively.
Morocco also held its benchmark rate at 2.25 percent.
The decisions show that falling inflation has not resulted in a uniform shift towards monetary easing across Africa. Central banks continue to assess domestic conditions alongside risks from energy prices, geopolitical tensions and global financial markets.
Africa’s monetary policy paths diverge
September’s decisions demonstrate the growing differences in monetary policy across Africa.
Nigeria recorded the largest reduction at 350 basis points, followed by 250-basis-point cuts in both Zambia and Zimbabwe. Angola reduced its rate by 100 basis points, while South Africa moved in the opposite direction with a 25-basis-point increase.
For Nigeria, attention will now turn to how the significant reduction affects lending rates, investment and economic activity, while policymakers continue to monitor inflation and exchange-rate stability.
The September moves suggest that African central banks are increasingly tailoring interest-rate decisions to their individual economic conditions rather than following a single continental trend.
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