Inflation to average 14.1% across Sub-Saharan Africa in 2025

By Steve UMIDHA

There has been a noticeable easing inflation across the Sub-Saharan Africa, driven by strong statistical base effects and lower energy prices.

Elevated regional inflation in 2024 – inflation averaged 19.8% in SSA, the highest level in more than two decades – provided a relatively high base which is helping cool headline figures in 2025.

As a result, the BMI survey powered by Fitch Solutions forecasts that inflation will average 14.1% across the region in 2025, lower than 2024 but still above the 2014-2023 average of 11.4%.

Furthermore, significant global trade uncertainty since the January announcement of tariffs by the Trump administration has pushed global energy prices down.

This has helped cool price pressures across SSA, which paired with monetary easing by developed market central banks, has seen most major central banks commence or continue their monetary easing cycles.

“Some markets have bucked the trend, going against our key theme. In Ghana, stubbornly high inflation and premature policy rate cuts have led the central bank to interrupt its easing cycle, hiking the policy rate in March.

In other markets such as the DRC and Uganda, global trade uncertainty has led policymakers to be more cautious than we expected, leading to delayed monetary easing cycles,” reads in part the survey.

Key Developments: Despite the limited fiscal data available for 2025 so far, early signs suggest that this prediction is unfolding in line with our expectations. Several governments that ran sizeable fiscal deficits last year have shifted toward greater fiscal restraint.

In Ghana, the unwinding of election-related spending has contributed to the budget deficit narrowing to 1.0% of GDP in Q1 2025, down from 2.2% a year earlier.

In addition, the Senegalese authorities have pledged stronger fiscal discipline, following the Court of Auditors’ revelations of widespread underreporting of expenditure and public debt, and the subsequent suspension of the country’s IMF programme. Meanwhile, in Tanzania, the new 2025/26 budget outlines a renewed fiscal tightening drive, centered on tax reform, new levies and improvements in revenue collection.

As expected, however, fiscal consolidation progress across SSA remains sluggish, constrained by political headwinds.

In South Africa, we now project the budget deficit to widen in its FY2025/26 (April-March) due to the withdrawal of a planned VAT increase, after opposition from the Democratic Alliance – part of the coalition government – forced revisions to the initial budget.

In Kenya, the authorities did not include tax hikes in the 2025/26 budget, signaling slow progress towards narrowing the deficit. Meanwhile, Nigeria’s fiscal consolidation efforts appear to have stalled at the beginning of the year, as weaker oil prices and limited gains in non-oil revenue weighed on federal intakes.