Across sub-Saharan Africa, stronger local currencies are giving businesses a welcome breather in 2025.
After years of rising costs, companies are finally seeing inflation ease and expenses reduce.
Stronger Currencies Gains Ease Pressure
Moreover, five of the seven economies tracked by S&P Global’s PMI — including Nigeria and Ghana — have gained.
For instance, the Ghanaian cedi and Zambian kwacha have each strengthened around 15% against the US dollar.
Similarly, South Africa’s rand and Nigeria’s naira have appreciated, helping slow business cost growth across the region.
Consequently, input costs rose in September at the slowest pace since 2020, according to S&P Global data.
At the same time, selling prices increased at one of the weakest rates seen in five years.
In Ghana and Zambia, purchase prices even fell temporarily, offering rare relief from imported inflation.
Even in Nigeria, where consumer inflation remains above 25%, firms reported slower input-cost growth.
Meanwhile, stabilising exchange rates are easing supply chain pressures, particularly in manufacturing and consumer goods.
Between June and August, businesses increasingly cited currency gains as a reason for falling prices.
Read Also: Royal Exchange Q3 Pre-Tax Profit Rises To ₦1.49Bn
Central Banks Respond
Central banks are responding actively: Ghana cut interest rates by 650 basis points over two meetings.
Likewise, Nigeria reduced its benchmark rate by 50 points to 27% — its first cut in five years.
Additionally, Kenya, Mozambique, and South Africa eased borrowing costs, while Uganda has kept rates steady.
Zambia, which previously raised rates, plans to cut 50–100 points as inflation slows.
Private Sector Rebounds
As a result, private-sector activity expanded at its fastest pace since May, boosted by orders, hiring, and inventory growth.
Zambia recorded its strongest business growth in nearly two years, while Kenya returned to expansion.
Harker of S&P Global commented, “The private sector enters the final quarter of 2025 on solid footing.”
This regional trend mirrors a global slowdown in price pressures, especially outside the United States.
Stronger non-US currencies and lower import costs are helping moderate cost growth worldwide.
After years of turbulence, Africa’s improving currency and inflation trends indicate a potential policy reset.
Looking ahead, economists say governments must manage budgets, investment flows, and domestic demand effectively.
