The world is currently dealing with high inflation, and Africa is not immune, with countries on the continent printing record high inflation rates in 2022. The rise in the inflation rate coincides with the rise in crude oil prices, which has occurred in the midst of the conflict between Russia and Ukraine.
The rising cost of energy around the world has translated into a significant uptrend in most economies, with prices of goods and services reaching unprecedented highs.
The International Monetary Fund also forecasts that current inflationary pressures will last until 2023, raising further concerns about a global economic downturn. Similarly, the IMF raised its inflation forecast for advanced economies to 5.7 percent from 8.7 percent for emerging market and developing economies.
In response to the rising inflation rate, monetary authorities in several countries have raised interest rates in an effort to contain the rising cost of goods and services. However, this has yet to produce any positive results, as the inflation rate remains stubbornly high.
However, the IMF’s managing director has urged central banks in each country to rein in the rising inflation rate. “Even now, prices are creeping up,” she claims. “We need to calm it down,” she explained. “Central banks in each country must take decisive steps to suppress inflation until it is clear that the inflation rate is moving within a specific range.”
Based on recent inflation figures, compiles a list of African countries and how they fare in terms of inflation rate.
Sudan – 220.7 percent (April 2022)
Sudan’s inflation rate fell to 220.7 percent in April 2022, down from 263.2 percent in March 2022. Sudan topped the list of countries with the highest inflation rate in the world last year, with a 12-month moving average of 382.8 percent.
Zimbabwe – 191 percent (June 2022)
Zimbabwe’s inflation rate increased to 191 percent in June 2022 from 132 percent the previous month, further eroding citizens’ purchasing power.
Zimbabwe’s inflation rate has risen from 66 percent to more than 130 percent since the beginning of the Russia-Ukraine conflict in May. It increased by another 200 percent in two months.
Ghana – 29.8 percent (June 2022)
Ghana’s inflation rate accelerated to 29.8 percent in June 2022, up from 27.6 percent the previous month and the highest in 19 years. This implies that the month-on-month inflation rate between May and June 2022 was 3%.
Similarly, food inflation in June 2022 was 30.7 percent, compared to 30.1 percent in May 2022. Non-food inflation was 29.1 percent in May 2022, up from 25.7 percent the previous month. The rise in the inflation rate was attributed to increases in bus fares and other transportation costs.
Nigeria – 18.6 percent (June 2022)
Nigeria’s inflation rate increased to a 65-month high of 18.6 percent in June 2022, up from 17.71 percent the previous month, marking the fifth consecutive monthly increase in the rate of inflation. The last time Nigeria’s inflation rate reached 18.6 percent was in January 2017, when it stood at 18.72 percent.
On a month-to-month basis, the inflation rate increased to 1.82 percent in June 2022, which is 0.03 percent higher than the rate recorded in May 2022. (1.78 percent ). Food inflation increased to 20.6 percent in June 2022, up from 19.5 percent in May 2022, while core inflation increased to 15.75 percent, up from 14.9 percent the previous month.
The increase in the inflation rate is largely due to the rise in energy prices, which has affected transportation costs across the country and, as a result, food prices.
Rwanda – 16.1% (June 2022)
Rwanda’s annual inflation rate accelerated to 16.1 percent in June 2022, up from 14.8 percent the previous month. It was the highest inflation rate since March 2009, with food and non-alcoholic beverage prices rising 26.1 percent, the most since February 2020, due to commodity price increases.
Egypt – 13.2 percent (June 2022)
Egypt’s monthly inflation rate fell slightly to 13.2 percent in June 2022, the first decrease in seven months. Despite the decrease, the inflation rate remains high when compared to the previous year.
As a result, Egypt’s annual inflation rate increased to 14.7 percent in June, up from 5.3 percent in the same month last year. The rising rate of inflation influenced the Central Bank of Egypt’s decision to raise interest rates for the first time since 2017, and then again in May 2022.
Botswana – 12.7% (June 2022)
Botswana’s annual inflation rate increased to 12.7 percent in June 2022, the highest since January 2009, and compared to 11.9 percent in May, pushed up by higher global energy prices.
Prices for transportation, food and nonalcoholic beverages, housing and utilities, and miscellaneous goods and services rose the most. Consumer prices rose 1.3 percent over the previous month, following a 2.6 percent increase in May 2022.
Kenya – 7.9 percent (June 2022)
Kenya’s inflation rate soared to a 58-month high in June 2022 due to rising food prices, breaching the government’s upper limit target for the first time since August 2017. (7.5 percent ). The inflation rate increased by 0.8 percentage points in comparison to the previous month’s figure of 7.1 percent.
According to Macdonald Obudho, Managing Director of the Kenya National Bureau of Statistics (KNBS), the rise in inflation was primarily due to increases in the prices of commodities such as food and non-alcoholic beverages, furnishings, household equipment and routine household maintenance, transportation and housing, water, electricity, gas, and other fuels.
South Africa – 6.5 percent (May 2022)
In May 2022, South Africa’s inflation rate increased to 6.5 percent, up from 5.9 percent the previous month. For the first time in more than five years, the rate soared above the central bank’s target range.
This is also the highest reading since January 2017, when the rate was 6.6 percent. According to Statistics South Africa, transportation and food and non-alcoholic beverages accounted for just over half of the annual rate, with sharp price increases recorded in both categories. Fuel remains a major contributor to the rising inflation rate.
Why is this significant?
It is worth noting that the current inflationary pressure felt by African economies, including Nigeria, is a global phenomenon that is not limited to a few countries. For example, Britain’s inflation rate hit 9.1 percent in May, a new 40-year high and a slight increase over the previous month. Similarly, the US inflation rate rose to 9.1 percent in June, the highest in nearly 41 years.
Furthermore, according to International Monetary Fund (IMF) forecasts, Argentina faces a 90 percent inflation rate by the end of the year due to rising prices of goods and services after Economy Minister Martin Guzman resigned earlier this month.
