Currency appreciation across sub-Saharan Africa (SSA) helped ease business cost pressures in September 2025, with prices rising at the slowest pace since 2020, according to S&P Global's latest Purchasing Managers' Index (PMI) report.
The agency said five of the seven economies it tracks saw their currencies strengthen during the first nine months of the year, supported by softer dollar prices, tighter monetary policy, fiscal consolidation, and improved access to external credit. "The Ghanaian cedi and Zambian kwacha have each appreciated by 15% against the US dollar so far this year, while the South African rand and Nigerian naira have also seen gains," said Andrew Harker, Director of Economic Indicators & Surveys at S&P Global Market Intelligence.
The stronger currencies reduced input cost pressures in economies that have experienced persistent inflation. Ghana and Zambia both recorded declines in purchasing prices at points during the year, while Nigeria saw its weakest input price growth since March 2020 in the third quarter. Selling prices across the region rose at the slowest pace in five years last month, despite a slight increase from August.
"Normally, any references to exchange rates or the dollar being linked to rises in purchase prices as downward pressure on local currencies feeds through to higher costs for imported items and those priced in dollars," S&P said. The company noted that between June and August, mentions of exchange rate effects pushing prices down outnumbered those linking them to increases for the first time since the full seven-country PMI survey began.
Easing inflation has allowed several SSA central banks to shift focus toward growth support. As of September, Nigeria, Kenya, Ghana, Mozambique, and South Africa had all reduced benchmark interest rates compared with the start of the year.
Ghana's central bank cut its policy rate by 650 basis points over its last two meetings, while Nigeria ended a five-year tightening cycle in September with a 50-basis-point reduction to 27%. In contrast, interest rates remain unchanged in Uganda, and Zambia has been the only country to raise rates in 2025. S&P expects Zambia to lower rates by 50–100 basis points at its November meeting as inflation moderates.
Business activity across SSA grew at the fastest pace in five months in September, driven by lower input costs and rising new orders. Employment expanded for the 12th consecutive month as firms increased purchasing and inventory levels.
Zambia recorded the strongest growth in nearly two years, while Kenya's private sector returned to expansion following protest-related disruptions. Ghana was the only market to see a decline in output, though new orders rose and business confidence remained firm.
"The SSA private sector enters the final quarter of the year on a solid footing, in part at least due to the currency gains seen over the course of 2025 so far," Harker said.
Source: Finance in Africa
