Rising fuel costs are pushing inflation in Rwanda towards 20%, while price pressures in Ghana remain concentrated in locally produced goods and services and inflation has eased in Egypt and Angola, exposing the different forces shaping monetary policy across African economies.
“Africa is not one country,” Dumebi Oluwole, Economist (Africa and EMEA), told DNE Africa. “When we isolate each market and bring out its nuances, we can really test the drivers.”
Rwanda faces the sharpest energy-driven pressures among the four countries. Petrol rose from 1,989 Rwandan francs a litre in November 2025 to 2,938 francs, while diesel increased from 1,900 to 2,927 francs, according to figures cited by Oluwole.
Energy prices have risen by about 45% in a year. A weaker franc has added to import costs, while higher fuel prices have pushed up transport expenses and fed through to food.
Food inflation has exceeded 20%, and overall inflation is around 20%, far above the central bank’s target range of 2% to 8%. Further monetary tightening may be needed to bring price growth back towards target, Oluwole said.
Ghana’s inflation problem is less acute but has a different composition. Inflation rose to 5.2% in September, with non-food inflation at 6.2%, compared with 4% for food. Non-food items accounted for nearly two-thirds of the overall increase.
Services inflation reached 8.3%, while housing, water and energy recorded inflation of 10.3%. Restaurant prices rose by 9.2%, with transport and fuel also contributing to price pressures.
About 86% of Ghana’s inflation now comes from locally produced goods and services, according to figures cited by Oluwole.
“This matters because it helps us understand the key drivers of inflation in Ghana, and why the central bank is neither cutting nor hiking much, holding its rate at 14%,” she said.
Angola offers a contrasting picture. Its central bank maintained a policy rate of 19.5% in 2024, before the latest oil-price shock, helping establish a restrictive monetary stance.
The kwanza has remained broadly stable since late 2024, trading at about 913 to the dollar in September. That stability matters for an economy reliant on imported consumer goods, while oil exports, which account for more than 90% of total exports, generate foreign exchange.
Inflation has fallen to 8.43%, its lowest level since 2015, allowing the central bank to cut its policy rate to 14.75%.
Egypt has also recorded an improvement, though the decline in inflation has been uneven. Urban inflation fell to 13.9% in September and core inflation to 14.1%, supported by tight monetary policy and a more flexible pound since 2024.
The Central Bank of Egypt (CBE) does not expect inflation to reach its target until the second half of 2027, according to Oluwole.
The contrasting inflation trends highlight the limitations of relying on interest rates alone to contain price pressures. While monetary tightening can help support currencies and curb demand, it cannot directly address rising energy costs, transport bottlenecks or weaknesses in domestic supply chains.
Oluwole said African policymakers must distinguish between demand-driven inflation and price increases stemming from higher production and import costs. Without tackling these underlying supply-side pressures, she warned, tighter monetary policy could dampen economic activity without resolving the factors driving inflation.
