African nations’ inflation battle splits as half see July relief, others face rising prices

Africa’s inflation battle is becoming increasingly uneven, with half of 16 major economies analysed recording lower annual inflation in July, while almost as many saw price pressures accelerate.

BusinessDay analysis of the data from Trading Economics shows that eight of the 16 economies recorded declines in their headline inflation rates between June and July 2026, while seven reported increases. Inflation was unchanged in Zambia, highlighting a continent where price pressures are increasingly being shaped by country-specific factors rather than moving in the same direction.

The divergence was particularly stark between Ethiopia and Zimbabwe.

Ethiopia, Africa’s second most populous nation, recorded the largest increase among the economies analysed, with annual inflation jumping 1.4 percentage points to 15.3 percent in July from 13.9 percent in June. Zimbabwe recorded the biggest decline, with inflation falling 1.5 percentage points to 3.2 percent from 4.7 percent.

The contrasting movements underscore how food prices, energy costs, exchange-rate movements and geopolitical shocks are producing increasingly different inflation outcomes across Africa.

Disinflation continues in half of major economies

The eight economies that recorded lower inflation were South Africa, Nigeria, Angola, Zimbabwe, Ghana, Tunisia, Mozambique and Botswana.

South Africa’s annual inflation rate fell to 4.3 percent in July from 5 percent in June, marking its first slowdown in five months. Softer transportation costs were a major driver, with transport inflation falling to 8.9 percent from 12.7 percent, while fuel inflation slowed to 20.6 percent from 34.3 percent.

Food and non-alcoholic beverage inflation also eased to 0.9 percent from 1.6 percent, helped by lower cereal prices and slower meat-price growth.

The experience in Africa’s largest economy shows how lower global energy prices can quickly feed into domestic inflation. But the improvement may not be enough to persuade the South African Reserve Bank to loosen policy aggressively.

The bank left its repo rate unchanged at seven percent in July, with policymakers balancing a slightly improved inflation outlook against a fragile economic recovery. Governor Lesetja Kganyago warned that renewed Middle East tensions, particularly higher oil and fertiliser prices, could push inflation higher again if they spill into food and core prices.

Nigeria also recorded lower headline inflation, falling to 15.43 percent in July from 15.91 percent in June.

But the latest numbers for Africa’s most populous nation expose a major weakness in the headline disinflation story.

Food inflation, the largest component of the consumer basket, accelerated for the sixth consecutive month to 20.31 percent from 17.52 percent in June. That left food inflation almost five percentage points above headline inflation, signaling that the improvement in the overall inflation rate is not translating evenly into lower household costs.

The Central Bank of Nigeria kept its benchmark interest rate at 26.5 percent last month, citing persistent inflation risks and uncertainty from renewed conflict in the Middle East.

Angola continued to record one of the strongest disinflation trends in the sample. Inflation fell to 9.33 percent in July from 10.11 percent in June, marking the 24th consecutive month of deceleration. The single-digit inflation recorded in the North African country is the first one in nearly 11 years.

The easing was supported by the sustained stability of the kwanza and improvements in the domestic supply of essential goods. Transport inflation fell sharply to 3.65 percent from 15.40 percent, while food inflation also eased to 10.40 percent from 10.73 percent.

Ghana also returned to disinflation, with inflation falling to 4.6 percent from 5.3 percent in June.

Food inflation declined to 3.1 percent from 3.9 percent, while non-food inflation eased marginally to 6.1 percent. A more stable exchange rate helped curb imported inflation, with the cost of imported goods rising 2 percent year-on-year in July compared with 2.3 percent in June.

Seven economies face renewed price pressures

While eight economies recorded lower inflation, seven saw price pressures increase in July.

Ethiopia led the increase, followed by Mauritius and Egypt.

Ethiopia’s inflation accelerated for the fourth consecutive month to 15.3 percent, its highest level since January 2025. Food inflation also rose to 15.7 percent from 15.1 percent in June, with significant increases in sugar, jam, honey and chocolate, meat, and oils and fats.

Prices for sugar, jam, honey and chocolate increased by 39.4 percent year-on-year, while meat and oils and fats rose 21.6 percent and 20.3 percent respectively.

The acceleration has forced the East African country’s central bank to tighten policy. The National Bank of Ethiopia raised its benchmark interest rate by one percentage point to 16 percent in July, its first adjustment since the rate was introduced in 2024.

Egypt’s urban inflation also accelerated for the first time in four months, rising to 14.9 percent from 14.3 percent.

Food and beverage inflation, the largest component of the basket, jumped to 8 percent from 5.4 percent, its highest level in 14 months. Transport inflation remained elevated at 24.5 percent, reflecting the continuing impact of higher fuel prices.

The Central Bank of Egypt kept its key rate unchanged at 19 percent in July, extending its pause after an almost year-long monetary easing cycle.

Mauritius recorded the third-largest increase in the group, with inflation rising to 4.4 percent from 3.7 percent. Food and non-alcoholic beverage prices rebounded sharply, while housing and utilities, clothing and recreation also recorded stronger price growth.

Kenya, Uganda and Tanzania also recorded increases, although the movements were smaller.

Kenya’s inflation edged up to 6.5 percent from 6.4 percent, with transport inflation reaching 15.6 percent and food and non-alcoholic beverage inflation remaining elevated at nine percent.

Uganda’s inflation rose to four percent from 3.7 percent, its highest level since September 2025, although it remained below the central bank’s five percent medium-term target.

Tanzania’s inflation increased to 4.2 percent from four percent, driven by higher prices for transport, housing, restaurants, health, recreation and education.

Middle East conflict remains a common risk

Although the direction of inflation differs across countries, the Middle East conflict remains a common source of uncertainty.

Higher oil and fertiliser prices can feed into transportation, agriculture and food costs, creating renewed inflationary pressure even in countries where headline inflation has been declining.

Kenya’s central bank has warned that continued disruption in global energy and fertiliser markets could keep inflation risks elevated. Tanzania also raised its policy rate by 50 basis points to 6.25 percent in July, its first hike since April 2024, citing the need to keep inflation within its 3–5 percent target range.

Read also: How Zimbabwe went from hyperinflation to one of Africa’s lowest inflation rates

Mozambique offers another example of how food and external shocks can shape the inflation outlook. Inflation edged down only marginally to 7.48 percent in July from 7.51 percent, helped by softer food inflation, while policymakers continued to warn about the potential impact of the Middle East conflict on international and domestic fuel and food prices.

Monetary policy is becoming increasingly divergent

The mixed inflation picture is also creating a more complicated environment for African central banks.

Some economies have enough evidence of disinflation to maintain or consider easing policy, while others are holding rates or tightening because renewed price pressures threaten to reverse earlier gains.

Ghana’s central bank paused after five consecutive rate cuts, keeping its policy rate at 14 percent. Nigeria, Kenya and Uganda also kept rates unchanged, while Ethiopia and Tanzania raised rates.
This divergence means Africa’s central banks are unlikely to follow a single monetary-policy cycle in the months ahead.

Instead, policymakers will increasingly have to respond to domestic inflation dynamics, including food supply, exchange rates, fuel prices and fiscal conditions.

Africa’s disinflation story is fragmenting

The July data do not show that Africa has lost its battle against inflation. Eight of the 16 major economies analysed recorded lower annual inflation, with Zimbabwe, Botswana, Angola, South Africa and Ghana posting particularly notable declines.

But the seven economies where inflation increased show that the disinflation process remains vulnerable.

The gap between Ethiopia’s 1.4 percentage-point increase and Zimbabwe’s 1.5 percentage-point decline captures the scale of the divergence.

More importantly, Nigeria’s experience shows that even falling headline inflation can mask persistent pressure in essential categories such as food.

For investors and policymakers, the message from July is therefore less about whether inflation is rising or falling across Africa and more about how differently price pressures are evolving from one economy to another.

The continent’s inflation battle is no longer moving as one.

The next phase will be shaped by each country’s ability to manage food and energy costs, exchange-rate pressures, supply constraints and the fallout from global geopolitical shocks.