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20 African countries with the highest benchmark interest rates, according to latest stats

September 28th 2022, 12:20:00 pm
20 African countries with the highest benchmark interest rates
  • Business Insider Africa presents 20 African countries with the highest benchmark interest rates.
  • The benchmark interest rates determine the cost of loans for borrowers as well as the rate of returns for lenders.
  • Note that we have referenced World Bank stats in compiling this list of 20 African countries with the highest benchmark lending rates.

On Tuesday, September 27 2022, the Central Bank of Nigeria increased the country's benchmark interest rate to a 20-year high of 15.5%. Despite the hike, Nigeria does not have the highest monetary policy rate (MPR) in Africa, as we shall see shortly.

First, some preambles

If you've been keeping abreast with the business developments around Africa, then you are probably aware that many countries are at risk of debt distress.

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According to a recent report by the International Monetary Fund (IMF), public debt ratios across Sub-Saharan Africa have risen to a 20-year high. Over the years, many countries borrowed heavily to finance their developmental needs. And now, quite a number of them are struggling to pay back the loans. Some are already exposed to debt distress, amid growing concerns about debt sustainability.

And there is more to worry about.

Focus on Africa's fiscal crises

Unable to service their debts or even restructure them to be able to borrow more, some countries are now grappling with fiscal challenges. An example of countries is Ghana which recently had to swallow its pride and approach the IMF for help.

The fiscal crises across Africa have been exacerbated by the ongoing war in Ukraine and other internal macroeconomic factors such as high inflation, soaring food and energy costs, etc.

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Meanwhile, some African Central banks have had to hike their benchmark lending interest rates due to the aforementioned macroeconomic challenges. We shall now focus on 20 African countries with the highest lending interest rates, according to available stats obtained from The World Bank.

What is the benchmark interest rate?

Investopedia defines lending interest rate as "the cost of debt for the borrower and the rate of return for the lender." In other words, it has to do with how much commercial banks charge borrowers on the amount or principal sum they borrowed.

Note that benchmark interest rates are set by central banks. The higher the rate, the more expensive the cost of the loan becomes. And the more expensive the cost of the loan, the more borrowers are discouraged from borrowing.

Below are 20 African countries with the highest lending interest rates, according to The World Bank

  1. Zimbabwe: Has a benchmark interest rate of 45.5%
  2. Madagascar: Has a benchmark interest rate of 43.3%
  3. Malawi: Has a benchmark interest rate of 24.2%
  4. Democratic Republic of Congo: Has a benchmark interest rate of 23.1%
  5. Ghana: Has a benchmark interest rate of 22%
  6. Uganda: Has a benchmark interest rate of 19.8%
  7. The Gambia: Has a benchmark interest rate of 19.5%
  8. Angola: Has a benchmark interest rate of 19.4%
  9. Sao Tome $ Principe: Has a benchmark interest rate of 19.1%
  10. Sierra Leone: Has a benchmark interest rate of 18.9%
  11. Mozambique: Has a benchmark interest rate of 18.2%
  12. Mauritania: Has a benchmark interest rate of 17%
  13. Tanzania: Has a benchmark interest rate of 16.7%
  14. Rwanda: Has a benchmark interest rate of 16.2%
  15. South Sudan: Has a benchmark interest rate of 16.1%
  16. Nigeria: Has a benchmark interest rate of 15.5%
  17. Liberia: Has a benchmark interest rate of 13.3%
  18. Guinea: Has a benchmark interest rate of 12.9%
  19. Burundi: Has a benchmark interest rate of 12.6%
  20. Kenya: Has a benchmark interest rate of 12.2%
Emmanuel Abara Benson
Emmanuel Abara Benson is an experienced business reporter and editor with over five years work experience. He covers corporate Africa, analysing some of the continent's leading companies and the economies in which they operate.

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