Six African Central Banks Cut Rates as Inflation Eases Across Continent

A wave of interest rate cuts is sweeping across Africa as inflation finally eases after years of pain. Six central banks cut rates in the first quarter of 2026: Kenya, Egypt, Angola, Ghana, Mozambique, and Zambia. It's one of the most coordinated monetary easing cycles the continent has seen.

Kenya's central bank delivered its 10th consecutive rate cut in March, bringing the policy rate down to 8.75% from a peak of 13% in 2023. That's a cumulative 425 basis points of cuts in just over a year. Inflation in Kenya fell to 2.3% in February, well below the target range of 2.5% to 7.5%.

Egypt has been even more aggressive. The Central Bank of Egypt has cut rates by a cumulative 725 basis points since February 2025, bringing the deposit rate down to 20% from 27.25%. Egyptian inflation peaked at over 38% in 2023 but has fallen to around 13% as of February 2026. That's still high, but the direction is dramatically better.

Angola cut rates to 16.5% from 19.5%, a 300 basis point reduction. Inflation there dropped from 27% in mid 2024 to 9.8% in early 2026. The kwanza has also stabilized after years of volatility, helping to anchor prices.

Ghana's central bank lowered rates to 26% from 29%, providing some relief after one of the worst inflation crises in the country's history. Inflation peaked at 54% in late 2022 but has now fallen to 22%. The Bank of Ghana signaled more cuts are coming if inflation continues to decline.

Mozambique cut its policy rate to 9.25%, the cheapest borrowing cost since 2015. Inflation fell to 2.8%, within the central bank's target range. Economic growth is picking up as lower rates stimulate lending and investment.

Zambia also joined the easing cycle, cutting rates by 150 basis points to 11%. Inflation dropped to 9.1% from over 15% a year earlier. The kwacha has strengthened, which helps keep import prices down.

What's driving this improvement across Africa? Several factors. Global food prices have stabilized after spiking during the pandemic and Ukraine war. Many African countries import large quantities of wheat, rice, and corn. When global prices fall, domestic food inflation eases.

Fuel prices have also moderated. While oil is currently elevated because of the Iran war, it's still below the peaks of 2022. Many African governments provide fuel subsidies, so lower oil prices reduce fiscal pressure and help contain inflation.

Currency stability is another key factor. Many African currencies experienced sharp devaluations in 2022 and 2023, which made imports extremely expensive. But exchange rates have stabilized in most countries as foreign exchange reserves rebuilt and investor confidence improved.

Better domestic agricultural production has also helped. Good rains in East Africa and Southern Africa improved crop yields. Maize, a staple food, became more abundant and affordable.

The interest rate cuts are providing real relief to African businesses and consumers. Small businesses that were paying 30% to 40% interest on loans can now borrow at 20% to 25%. That's still expensive by global standards, but much more manageable than before.

Housing markets are seeing increased activity. Mortgage lending, which nearly died during the high rate period, is starting to recover. Middle class families can once again afford home loans.

Challenges remain. Inflation in countries like Ghana and Egypt is still well above 10%. Debt levels are high across the continent, and some countries face refinancing challenges. Political instability in certain regions could derail progress.

But the overall trend is positive. For the first time in years, African central banks can ease policy and support economic growth instead of fighting runaway inflation. That's a huge shift that should benefit millions of people across the continent.