Africa’s central banks are no longer moving in step. In the same week, Nigeria slashed its benchmark interest rate while South Africa raised its own, a split that shows how differently the continent’s biggest economies are handling a turbulent global picture.
The Central Bank of Nigeria cut its Monetary Policy Rate by 350 basis points, from 26.5% to 23%. That is the biggest single reduction in almost two decades, and it follows two meetings where the rate was held steady. Governor Olayemi Cardoso described it as an operational reset meant to improve how policy filters through to the market, since real-world lending rates had drifted away from the official benchmark, rather than a shift in the overall policy stance.
South Africa went the other way. The Reserve Bank’s monetary policy committee unanimously raised its policy rate by 25 basis points to 7.25%, effective September 25, the second increase this year. Inflation reached 4.4% last month against a 3% target, and the bank expects it to exceed 5% this year, driven mainly by fuel price shocks linked to the war in the Middle East. The economy also contracted by 0.2% in the second quarter, though the bank still expects a second-half rebound and 1.2% growth for the year.
Elsewhere, Egypt, Ghana and Morocco have kept their rates unchanged, while Angola trimmed its rate by 100 basis points to 14.75%, its third cut in a row. The takeaway for businesses and borrowers: Nigeria is easing as inflation cools, South Africa is tightening to stop temporary price jumps from taking root, and the rest of the continent is waiting to see which approach proves right.