September 2, 2026/Cordros Report
In July and August 2026, most central banks across Africa delivered a similar broad message – the easing cycle that defined late 2025 and early 2026 has largely come to an end. So far this year, policy decisions across selected Sub-Saharan Africa (SSA) economies point to a three-tier monetary policy landscape, reflecting differences where each economy stood in its disinflation cycle when the US–Iran conflict broke out in February 2026.
The conflict triggered a sharp increase in global energy prices, with Brent crude approaching USD100.00/bbl in July before easing towards USD90.00/bbl in early August. However, the impact of the shock has varied considerably across economies, depending on the extent of their existing inflationary pressures and the progress already made on disinflation.
Economies that were further along in the disinflation process have retained some policy flexibility, while those facing renewed inflationary pressures have had to pause or tighten. Consequently, the divergence in monetary policy across the region primarily reflects differences in each country’s capacity to absorb higher energy prices without reigniting broader inflationary pressures. Against this backdrop, the six anchor economies we identified fall into three distinct monetary policy groups. The first group comprises economies where disinflation remains firmly on track, allowing monetary easing to continue.
Angola is the only economy in this group. The second group comprises economies where disinflation has stalled, prompting central banks to pause their easing cycles. Countries in this group include Egypt, Ghana, and Kenya. The third group comprises economies in which inflation is re-accelerating, inducing a tighter monetary policy stance. Rwanda and South Africa fall into this group. Across these groups, policy trajectories will be shaped by the evolution of oil prices and developments in the Middle East conflict, while the extent of domestic disinflation determines the policy flexibility available to each economy.
At a cursory glance, the recent monetary policy decisions by African central banks painted a picture of increased caution. Of the six economies considered in this report, four central banks left their policy rates unchanged, while only two adjusted rates. Precisely, South Africa held its policy rate at 7.0% following the 25bps hike delivered in May. Egypt, Ghana and Kenya, by contrast, left rates unchanged after easing aggressively earlier in the cycle. Their central banks are pausing to assess the inflationary impact of the recent oil price shock. Angola and Rwanda are the two policy outliers in the report coverage – Angola extended its easing cycle by cutting its policy rate by a further 125bps, and Rwanda hiked its policy rate by 50bps, even as the rest of the continent turns cautious.
Recent inflation trends explain the divergence in responses. The direction of price movements between May and July separates the region into two distinct groups. In one group, inflation has re-accelerated. South Africa’s inflation rose to a two-year high of 5.0% y/y in June (May: 4.5% y/y) as higher fuel prices fed into transport costs. Similarly, Egypt’s inflation edged higher to 14.9% y/y in July from 14.3% y/y, after easing briefly from 14.6% y/y in May, as core inflation, especially energy and other utilities price pressures, renewed in the month. Inflation also accelerated in Rwanda (13.8% y/y | June: 12.7% y/y) and Kenya (6.5% y/y | June: 6.4% y/y).
Higher transport and energy costs, compounded by Middle East-related shipping disruptions, contributed to the increase. Save for Rwanda, policy rates in these economies remain unchanged, although the policy bias is increasingly tilted towards tightening.
The other group moved in the opposite direction. Angola continued its disinflationary process, with headline inflation easing to 9.3% y/y in July from 10.1% y/y in June, creating scope for additional policy easing. Ghana’s inflation moderated to 4.6% y/y in July (June: 5.3% y/y), and well below the Bank of Ghana’s (BoG) target range of 6.0% – 10.0%. In these economies, falling or stable inflation gives monetary authorities room to assess whether external price pressures are temporary or persistent before adjusting policy rates.
The 2026 Policy Decision: Country-by-Country Analysis
Ultimately, the recent policy decisions make sense only in the context of the underlying macroeconomic dynamics. Whether a central bank can ease, must hold, or needs to tighten depends on its economy’s capacity to absorb the oil shock. That capacity is determined by growth, inflation, and the external and fiscal positions. The country-by-country analysis below assesses each economy against this backdrop.
Angola
The Standout Easing Stance
The country has the cleanest easing story in the report’s countries coverage. The Banco Nacional de Angola (BNA) cut its policy rate from 17.00% to 15.75% at its 130th MPC meeting on 14 July. This was the BNA’s second cut of 2026 and its most aggressive single move since 2023. The policy rate path from January to July 2026 comprised a HOLD at 17.5% in March, a 50bps cut to 17.0% in May, and a 125bps front-loaded cut in July. This brought the cumulative easing since the start of the cycle in September 2025 to 375bps.
Angola’s disinflation is the steadiest in the countries’ coverage, which gives the BNA room to cut while peers in the region hold. Headline inflation fell to 9.3% y/y in July, marking the first single digit reading in 22 years, from 13.4% y/y in February and a peak of nearly 30.0% in mid-2024. The monthly increase of 0.75% in July provides further evidence that the disinflation trend is intact rather than stalling, and the BNA has trimmed its 2026 inflation forecast to 8.6% from 11.5% (both ±1.0% margin in both cases). Economic growth is also holding up alongside the disinflation. GDP growth rose by 5.3% y/y in Q1-26, following a 5.7% y/y expansion in Q4-25. We believe the composition of growth is the more important signal. The non-oil GDP expanded 6.2% y/y, while the oil GDP contracted 0.2% y/y, suggesting that diversification is increasingly supporting growth beyond the oil sector.
The external position reinforces the easing case. The country’s FX reserves stood at USD14.93 billion in June, equivalent to 6.2 months of import cover. As an oil exporter, Angola’s FX reserves should benefit from higher Brent prices through stronger oil export revenues, unlike its energy import-dependent peers.
Outlook: We expect the BNA to cut by a further 50–100bps at its 14–15 September meeting. With disinflation intact, higher oil prices should support Angola’s external and fiscal positions, although the effect on domestic inflation will depend on the extent of pass-through to fuel and transport costs. The conditions that justified July’s cut, therefore, remain in place.
Rwanda
Outright Policy Tightening Case
Rwanda is the only economy in our coverage pursuing aggressive monetary tightening while maintaining exceptionally strong economic growth. The Banque Nationale du Rwanda (BNR) has raised the policy rate by a cumulative 200bps in 2026 to 8.75%, comprising a 50bps increase in February, a 100bps hike in May, and a 50bps increase in August, even as real GDP growth remains above 9.0%.
In Q1-26, real GDP grew by 10.0% y/y (Q4-25: 11.2% y/y), led by a 13.1% y/y expansion in industrial activity. This Q1-26 growth remains well above the IMF’s estimated potential growth rate of c.7.0% – 7.2%, suggesting that economic activity has sufficient momentum to absorb tighter monetary conditions without necessarily triggering a sharp deterioration in growth.
Inflation remains the primary justification for the BNR’s restrictive policy stance. Headline Inflation accelerated to 13.8% y/y in July 2026 (June: 12.7% y/y), its highest level since September 2023 and well above the BNR’s 2.0% – 8.0% target range. Food inflation rose sharply to 12.6% y/y (June: 8.0% y/y), and core inflation increased to 10.0% y/y (June: 9.7% y/y). This suggests that headline inflation is being driven primarily by food supply shocks as well as core and services price pressure. The latter is more directly responsive to monetary policy, strengthening the case for a continued restrictive policy stance.
Exchange rate developments add another layer to inflation risk. Imported goods account for 23.0% of Rwanda’s CPI basket, making inflation relatively sensitive to currency movements. The franc’s 1.1% depreciation against the euro in July 2026, therefore, increases the risk of further imported price pressures feeding into already elevated domestic prices.
The currency channel is therefore becoming the binding constraint in this tightening cycle, rather than weakness in the real economy. This reflects the country’s relatively limited FX reserves buffer. Gross FX reserves of approximately USD2.2 billion covers four months of imports — above the 3-month IMF threshold, and below the c.6-month regional norm. The current account deficit is projected at 14.9% of GDP, alongside a fiscal deficit of c.6.0% of GDP. Given the size of these external and fiscal deficits, the FX reserves buffer is relatively thin, leaving the franc vulnerable to further pressure. This position adds a currency defence rationale to the inflation case for maintaining high policy rates.
Outlook: We expect the BNR to hold at its 25 November meeting, with the risk skewed towards a hike rather than a cut. A renewed slide in the franc or a reserve drawdown below the current four-month level would increase the likelihood of a policy rate hike.
South Africa
The Hawkish Hold that Surprised
The South African Reserve Bank’s (SARB) July 2026 decision to hold its policy rate was more hawkish than the unchanged rate suggests. The decision came against a backdrop of renewed inflationary pressure. Headline Inflation accelerated to 5.0% y/y in June (May: 4.5% y/y), driven primarily by an energy price shock with transport inflation rising to 12.7% y/y (May: 9.4% y/y) following a 34.4% increase in fuel prices. However, the elevated price pressures were not entirely attributable to energy. Housing and utilities contributed 1.3ppts to the headline print, while rental inflation edged up to 4.1% y/y (May: 4.0% y/y), pointing to some persistence in underlying price pressures. Against this backdrop, the MPC’s 4–2 vote is notable: two members favoured a rate increase to reinforce the Bank’s commitment to its 3.0% inflation target. The majority, however, opted to hold to avoid undermining the fragile economic growth recovery.
The recovery in economic activity provided a counterweight to the elevated inflation reading and supported the case for holding the policy rate. Real GDP expanded by 1.9% y/y in Q1-26, up from 0.8% y/y in Q4-25 and above the 1.1% growth recorded in 2025. The SARB subsequently raised its 2026 growth forecast to 1.4% from 1.2%, although this remains below its projected growth rate of 2.0%.
Against this backdrop, the SARB has highlighted exchange rate movements as a key additional risk. Specifically, the rand depreciated to ZAR16.70 per US dollar ahead of the July MPC meeting, near a two-month low, and weakened by roughly 1.9% around the decision before partially retracing in early August. The rand’s depreciation reflected a combination of global monetary policy expectations, elevated oil prices and domestic market factors. In our view, rand’s depreciation, therefore, represents an inflation risk rather than a significant current driver of inflation.
Outlook: We expect the SARB to hold rates at its next meeting, though the near term bias has turned hawkish. With inflation at 5.0%, well above the 3.0% target, and the July split vote showing two members already favouring a hike, the threshold for further easing has risen. A second inflation reading above 5.0% would provide evidence that the energy shock is spreading beyond transport while sustained rand depreciation would increase the likelihood of a rate hike.
Egypt
Patience atop a large easing cushion
Egypt holds the largest easing cushion in our coverage. In August 2026, the Central Bank of Egypt (CBE) kept its overnight deposit rate unchanged at 19.0%, a level that remains restrictive in real terms. Three factors give the CBE room to maintain its current stance – the expected moderation in inflation, resilient growth and a stronger external position.
Inflation rose to 14.9% y/y in July (June: 14.3% y/y) due to renewed pressure in food and core prices. The increase was led by food inflation, which rose to 8.0% y/y (June: 5.4% y/y) while core inflation edged up to 14.7% y/y (June: 14.3% y/y), indicating that underlying price pressure remains elevated. The CBE has also raised its inflation forecast for 2026/2027FY to 13.5% from 12.0%, reflecting the persistent price pressure. The Bank expects inflation to accelerate through Q3-26 before declining in Q4-26. CBE forecasts Inflation to moderate to 7.0% (±2.0%) in H2-27, bring inflation firmly back into single-digit territory. The shallow pace of near term disinflation argues for patience, while the still positive real policy rate preserves the CBE’s scope to ease once price pressures moderate more convincingly.
Egypt’s resilient growth also reduces the need for an immediately policy response – real GDP grew by 4.9% y/y in Q1-26 (Q4-25: 5.3% y/y). The breadth of the growth drivers is also significant – trade, communications, non-oil manufacturing and agriculture all contributed – reducing the economy’s dependence on any single sector. That resilience gives the CBE greater scope to maintain a restrictive policy stance without materially undermining the recovery.
The stronger external position also supports the sustainability of the current policy stance. Remittances surged by 31.2%, while the current account deficit narrowed to 3.4% of GDP in 2025, reducing external financing pressures and easing the need to maintain a highly restrictive policy stance for currency support purposes. The stronger external position gives the CBE greater flexibility to calibrate monetary policy in line with domestic inflation and growth conditions.
Outlook: We expect the CBE to hold again at its 17 September meeting. Unlike the more hawkish holds elsewhere on the continent, Egypt’s policy bias remains tilted towards the next cut. With the policy rate at 19.0% and headline inflation at 14.9%, the current ex-post real-rate buffer is around 4.1 ppts, leaving room for further easing once inflation and external risks moderate.
Ghana
The Paused Rate with an Easing Bias
Ghana has paused its easing cycle in response to imported inflation risks rather than domestic weakness. At its July Meeting, the Bank of Ghana (BoG) held its policy rate at 14.0%, marking a second consecutive “HOLD” after five rate cuts. The decision is defensive, reflecting imported inflation risks despite a strong domestic backdrop.
Headline inflation eased to 4.6% y/y in July (June: 5.3% y/y), falling from a six-month high as food price pressure moderated and fertiliser and fuel costs reduced. The absence of a surge in oil prices kept inflationary pressure muted, although inflation remains close to the lower end of the medium term band and well below the 13.7% recorded a year earlier.
Ghana has the strongest domestic backdrop among the low-inflation economies in our coverage. Real GDP grew by 6.4% y/y in Q1-26 (Q4-25: 5.9% y/y), its fastest pace in almost two years, while the Composite Index of Economic Activity rose by 13.4% in May. Nominal private sector credit growth accelerated sharply to 41.2% in June from 8.6% a year earlier. The sharp acceleration in credit growth could add to demand-side pressure, particularly if imported-cost pressure re-emerges. Resuming monetary easing could therefore reinforce domestic demand pressures and increase the risk of further exchange rate pass-through. In our view, the level of credit growth argues more strongly against further policy rate cuts than the inflation reading alone.
Exchange rate developments point in the same direction. The cedi has weakened by about 9.5% against the USD year-to-date. Although it has recovered part of the losses recorded in May, the currency remains volatile. Cutting rates now could trigger renewed depreciation and increase exchange rate pass-through to domestic prices, reinforcing the BoG’s inflation concerns. This potential feedback loop provides another reason for the BoG to wait rather than ease amid a still-volatile external environment.
Outlook: We expect the BoG to hold at its 22–24 September meeting, having already paused in July after five consecutive rate cuts. In our view, Ghana’s easing bias is intact, but the near term case for waiting has strengthened given rising credit growth and renewed exchange rate risks.
Kenya
Easing Paused, Comfortably Neutral
Kenya currently has the most balanced monetary policy backdrop in our coverage, but this stability is contingent rather than structural. The Central Bank of Kenya’s (CBK) neutral stance is supported by a strong external buffer, particularly its ample FX reserves. However, the same oil price surge driving regional inflation is beginning to put pressure on that buffer. After nine consecutive cuts — the longest streak in its history — the CBK lowered the Central Bank Rate (CBR) to 8.75% in February and has held since, judging the stance appropriate to keep inflation expectations anchored and support exchange rate stability.
Headline inflation rose to 6.5% y/y in July (June: 6.4% y/y), within the CBK’s 2.5% – 7.5% inflation band but in its upper half. Core inflation remained low at 3.2% y/y (June: 3.1% y/y), suggesting that underlying domestic price pressures remain contained. Non-core inflation eased marginally to 15.0% y/y (June: 15.1% y/y), but remains the main source of inflationary pressure, reflecting the sensitivity of the CPI basket to fuel and food prices. With average inflation projected at around 5.4% in 2026, the principal near term inflation risk appears external rather than domestic. Higher crude oil prices, therefore, remain the key variable to watch.
Domestic activity gives the CBK little reason to move in either direction. Real GDP grew by 5.3% y/y in Q1-26 (Q4-25: 4.0%). Growth remained broad based, led by accommodation and food services (14.7% y/y vs Q4-25: 18.3% y/y), mining and quarrying (9.1% y/y vs Q4-25: 17.8% y/y) and construction (6.6% y/y vs Q4-25: 7.3% y/y). The domestic economy, therefore, provides little justification for either a cut or a hike. The National Treasury trimmed its 2026 growth forecast to 5.0% from 5.3%, citing the expected economic drag from the conflict in the Middle East.
The external sector position gives the CBK room to maintain a neutral stance. FX reserves of USD14.10 billion, equivalent to around 6.0 months of import cover, and a relatively stable shilling near KES129.5/USD gives the CBK room to maintain its current stance even as the current account deficit widens toward 3.0% of GDP. These buffers provide some protection against the external financing pressures associated with a wider deficit. However, crude oil remains the key risk, making the neutral stance contingent on oil prices not rising materially further.
Outlook: We expect the CBK to hold the policy rate at the next MPC meeting, extending the pause it has maintained since cutting the CBR to 8.75% in February. In our view, Kenya’s stance is broadly neutral rather than biased in either direction – there is little impetus to cut further, but no clear case for tightening.
One Shock, Diverging Policy Paths
The July-August 2026 policy round reinforces that the era of a single African monetary story is behind us. A common oil price surge, which pushed Brent above USD100.00/bbl in July amid the Middle East conflict, has produced sharply divergent policy responses. That divergence reflects the different cyclical, inflation and external positions in which the shock reached each economy.
The divergence has created distinct monetary policy stances and investment opportunities across the region. Where disinflation is well advanced and the terms of trade are supportive, easing can continue; Angola is currently the only clear example in our coverage. Where inflation is contained and external buffers remain strong, central banks can afford to maintain a cautious stance, as reflected in the materially positive real policy rates in Kenya and Egypt. And where inflation is re-accelerating, policy is leaning towards tighter policy, as in South Africa and Rwanda, while Ghana remains on hold despite heightened external inflation risks.
The policy divergence argued against treating the region as a bloc and instead favours a country-by-country approach to pricing. Economies with positive real rates and relatively credible monetary policy frameworks may remain attractive for carry opportunities, although currency and geopolitical risks could offset the yield advantage. Those defending against re-accelerating inflation face a higher-for-longer risk, particularly if current market pricing underestimates the persistence of inflation.
Oil prices remain the key variable that could bring monetary policy trajectories back into closer alignment across the continent. A sustained de-escalation in the Middle East could support a return to easing, while renewed oil price pressures could extend or intensify the tightening bias in economies where inflation is already re-accelerating. Until these risks become clearer, differences in country-level monetary policy trajectories are likely to remain more important than a common regional direction.