Across Africa, central banks are wielding high Monetary Policy Rates (MPRs) as a weapon against persistent inflation, currency volatility, and economic instability, but the steep borrowing costs are stifling growth for businesses and households. According to Nairametrics Research, Zimbabwe, Sudan, and Ghana lead the continent with the highest MPRs in 2025, reflecting aggressive monetary tightening to curb runaway prices and stabilize weakening currencies. However, these elevated rates, ranging from 17.25% to 35%, are making credit prohibitively expensive, posing a delicate balancing act for policymakers aiming to foster economic recovery.
Zimbabwe tops the list with an MPR of 35%, driven by relentless hyperinflation at 95.8% in July 2025. The Reserve Bank of Zimbabwe’s stringent policy aims to tame price volatility exacerbated by currency depreciation and structural economic weaknesses. The introduction of the gold-backed ZiG currency in 2024 sought to reduce reliance on the US dollar, but low confidence and exchange rate instability continue to fuel inflation, rendering credit nearly inaccessible for small businesses and consumers. This pushes economic activity into the informal sector, limiting formal growth prospects.
Sudan follows with an MPR of 28.3%, unchanged since early 2023, grappling with a staggering 113.35% inflation rate in June 2025. Political instability, ongoing conflict, and limited access to global capital markets have crippled the economy, with the Central Bank of Sudan relying on tight monetary measures to preserve the Sudanese pound’s value. However, triple-digit inflation and disrupted supply chains, particularly in conflict zones like Darfur, have frozen credit markets, leaving businesses and households struggling to afford basic goods.
Ghana’s MPR stands at 28%, raised in May 2025 to counter 13.7% inflation and stabilize the cedi. Supported by an IMF program and tighter fiscal controls, Ghana has reduced inflation from a 2023 peak of 43.1%. Yet, high borrowing costs, combined with debt sustainability concerns and foreign exchange liquidity pressures, continue to hamper private sector growth and domestic consumption. The Bank of Ghana’s efforts reflect cautious optimism, but elevated rates challenge businesses recovering from post-pandemic disruptions.
Nigeria, Africa’s largest economy, ranks fourth with an MPR of 27.5%, maintained in July 2025 after an aggressive tightening cycle initiated in 2022. The Central Bank of Nigeria (CBN) is combating 22.22% inflation, driven by naira depreciation (N1,565/$1 in the parallel market) and import-driven price pressures. While the CBN’s policies, including $4.1 billion in forex interventions in H1 2025, aim to attract foreign capital and stabilize the naira, high borrowing costs exacerbate challenges for businesses facing logistical bottlenecks and power shortages. Analysts anticipate potential rate cuts in late 2025 if inflation eases further.
Malawi’s MPR of 26% reflects efforts to manage 27.1% inflation, worsened by drought-induced food shortages and currency instability. The Reserve Bank of Malawi’s limited policy options strain small and medium enterprises (SMEs) and agricultural producers, who face costly credit amid subdued growth prospects. Similarly, the Democratic Republic of Congo’s 25% MPR addresses 5% inflation and currency repatriation delays in its mineral-driven economy, but high rates restrict private sector borrowing.
Egypt’s Central Bank raised its MPR to 24.5% to tackle 14.9% inflation, fueled by repeated currency devaluations and subsidy reforms. Despite IMF-backed adjustments, reliance on imported food and energy keeps prices elevated, pushing borrowers toward informal markets. Sierra Leone’s 23.75% MPR battles 7.1% inflation, driven by food insecurity and low foreign exchange reserves, with limited economic diversification amplifying the impact of tight policy.
Angola’s 19.5% MPR balances volatile oil revenues and 19.73% inflation, aiming to stabilize the kwanza while supporting banking liquidity. Liberia, with a 17.25% MPR and 11.6% inflation, closes the list, constrained by a shallow financial system that limits monetary policy effectiveness. High rates deter private sector credit, hindering economic expansion.
The MPR, a benchmark for commercial lending rates, is a critical tool for controlling money supply and inflation. Higher MPRs attract investors to fixed-income instruments like treasury bills but raise borrowing costs, straining governments, businesses, and households in fragile economies. Across these nations, central banks face a policy dilemma: curbing inflation without choking growth. For instance, Nigeria’s capital importation surged 67.12% to $5.64 billion in Q1 2025, reflecting investor confidence, but high MPRs risk slowing domestic investment.
Structural challenges, including weak institutions, fiscal imbalances, and external shocks like global commodity price volatility, complicate monetary policy effectiveness. In Zimbabwe and Sudan, hyperinflation and political instability exacerbate economic fragility, while Ghana and Nigeria benefit from reforms but face ongoing pressures from currency depreciation and import reliance. Analysts emphasize that without structural reforms to boost productivity, diversify economies, and strengthen governance, high MPRs alone may not achieve lasting stability. The African Development Bank projects 4% continental growth in 2025, outpacing global averages, but sustained progress hinges on addressing these underlying issues.
