One of the most significant impediments to wealth accumulation is inflation. Unfortunately, most African countries have the highest inflation rate, and many affected people are ignorant of it.
To give you an idea of the impact of inflation, if you had N1 million in 2010 and didn’t invest it, your N1 million would be worth N323,010.97 in 2020 because the ten-year average inflation rate was 11.8 percent. That means your N1 million is worth about N323 000. In other words, your N1 million will buy N323 000 worth of items in 2020.
According to Investopedia, inflation is defined as a considerable loss in a currency’s purchasing power. It can be assessed by the rate of increase in the price of products and services over a given period. One of the key drivers of inflation is dramatic increases in the cost of raw commodities. A surge in demand for products and services can also lead to a price increase, resulting in high inflation.
Excessive reliance on imports is common among African countries with high inflation rates. When a country’s import rate exceeds its export rate by a substantial margin, it is vulnerable to various economic difficulties, including high inflation.
With that in mind, the six African countries with the highest inflation rates are listed below:
The Republic of Sudan
The Republic of Sudan, in Africa’s northeast, has the highest inflation rate on the continent. Inflationary pressures have been building in the country due to dramatic currency depreciation and monetization of the fiscal imbalance.
According to trading economics, the country’s inflation rate is a staggering 340 percent.
At 60.74 percent, Zimbabwe’s inflation rate is the second-highest in Africa. Although still expensive, prices in the country have decreased by 600 percent since 2020.
Ethiopia’s inflation rate has risen to 33% due to the ongoing armed conflict that has harmed the economy.
Ethiopia’s annual inflation rate fell to 34.5 percent in January 2022, down from 35.1 percent in December, the highest level since February 2012.
Fighting between federal troops and Tigrayan forces in Ethiopia’s northern region has contributed to the country’s high inflation rate. In addition, 13.6 million people were food insecure in early December, according to the World Food Programme, due to drought, flooding, desert, high food costs, and the COVID-19 epidemic. Consumer prices grew 1.2 percent monthly, following a 1.4 percent increase the previous month.
Nigeria’s inflation rate is expected to reach 16 percent in 2021. In January 2021, the inflation rate in Nigeria’s urban areas increased by 17 percent over the preceding months, while the rural inflation rate increased by 15.9%. Africa’s largest economy, Nigeria had one of the highest inflation rates in the world in 2020.
Angola’s annual inflation rate increased for the ninth month in a row in December 2021, rising from 26.98 percent in November to 27.03 percent, the highest level since July 2017. Consumer prices grew 2.1 percent monthly, the same as the previous month, with food and non-alcoholic beverages (2.46 percent), alcoholic beverages and tobacco (2.20 percent), apparel and footwear (2.08 percent), and furnishings, domestic equipment, and maintenance all contributing (2.10 percent ). Angola has the fourth-highest inflation rate in Africa.
Zambia’s annual inflation rate fell for the sixth month in a row in January 2022, to 15.1 percent from 16.4 percent the previous month. Due to a slowing in food costs (16.9% vs. 19.9% in December) and despite a further depreciation of the kwacha, this was the lowest rate since March 2020.
Non-food inflation, on the other hand, has surged (12.7 percent vs. 12.1%), owing to increases in pump and transportation prices. Consumer prices rose 2.6 percent monthly, the biggest in a year, after rising 0.6 percent in December. Zambia has the sixth highest inflation rate in Africa.
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