Business magnate Aliko Dangote in July warned that “no growth will happen” in Nigeria with interest rates at a record 26% high. Policy rates hit three-year or historical highs in many African markets in 2024 as African central banks did not follow the global cycle of monetary easing, instead maintaining or raising rates. At what point will a prolonged tight monetary policy hurt credit access to MSMEs? When and to what extent will they adjust policy rates to stimulate the real economy?
Key points
- Why are central banks in many African countries struggling to control inflation?
- Do credit guarantee policies and other support measures go far enough to aid agricultural and micro-enterprises?
- Commercial banks meeting higher capital requirements: Will central bank borrowing be an option at attractive repo rates?