Rising Food, Energy Prices Fuel Cost of Living Crisis in Africa

The cost of living crisis in Africa is a major challenge facing the continent. The rising cost of food, fuel, and other essential goods and services is making it difficult for many Africans to meet their basic needs.

Nigeria's annual inflation rate accelerated to an 18-year high of 25.8% in August, as Africa's largest economy grapples with rising prices ahead of a central bank interest rate decision. The spike in inflation was caused by a combination of factors, including the removal of petrol subsidies and the end of exchange controls. The rising cost of living is having a significant impact on Nigerians, many of whom are struggling to afford basic necessities. The government is facing increasing pressure to take action to address the crisis. In South Africa, unaudited fuel data indicated significant petrol and diesel price increases, mainly driven by higher international oil prices, which had surged since August due to reduced output by major oil-producing nations.

According to the World Bank, economic growth in Sub-Saharan Africa (SSA) slowed to 3.6% in 2022, from 4.1% in 2021, and is projected to slow further to 3.1% in 2023. This downgrade is due to the persistent sluggishness of the global economy, declining yet high inflation rates, and challenging global and domestic financial conditions amid high levels of debt. Stubbornly high inflation, fueled by rising food and energy prices, weaker currencies, and low investment growth, continues to constrain African economies and create uncertainty for consumers and investors.