Inflation in key African economies will slow into next year but remain stubbornly high in Nigeria due to sporadic flooding and difficult terrain for Nigeria’s currency, the naira, a Reuters poll has found.

The acute shortage of dollars in much of the continent including Angola, Nigeria and Zambia has often put home inflation under significant strain due to a reliance on single commodity currency inflows such as crude oil and copper.

Still, the poll of 15 analysts taken in the past week showed inflation would moderate more in countries with better diversified sources of dollar revenues such as Kenya.

Inflation in Nigeria is expected to quicken to 29.1 per cent this year from an average of 24.5 per cent last year, before it slows to 17.2 per cent next year. It hit a 28-year high of 33.2 per cent in annual terms last month.

Nigeria central bank governor, Olayemi Cardoso, raised the monetary policy rate by 200 basis points to 24.75 per cent last month after a 400 basis point hike in February.

“Even with a more coherent monetary policy now in place, and potential naira stability, Nigerian inflation will only fall slowly this year,” Citi wrote in a note to clients.

“The high inflation rate reflects ongoing elevated food price inflation, which accounts for around 50 per cent of the CPI basket and is only marginally impacted by monetary policy,” Citi added.

High food price inflation is a result of flooding seen in many parts of the country in recent years, the rising cost of fertiliser and continuing insecurity in many food-producing regions.

Ghana inflation averaged 40.3 per cent last year, but is expected to slow markedly to 18.7 per cent this year and then to 12.1 per cent in 2025.

Angolan inflation is forecast to slow to last year’s average of 13.6 per cent next year from 23.7 per cent this year, while in Zambia it was seen slowing to 8.0 per cent in 2025 from 12.3 per cent this year.

Inflation in Kenya will remain one of the most-tamed in the region apart from South Africa, slowing to an average of 5.6 per cent next year compared with 6.3 per cent this year, the poll found.

A separate poll earlier this month predicted inflation in South Africa would slow to 4.6 per cent next year from 5.1 per cent this year. (THISDAY)

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