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2024 Presents Unique Challenges for Many African Economies Due to Rising Levels of Debt

The resurgence of global energy prices in the third quarter of 2023 is a timely reminder that central banks’ spirited war against inflation is yet to be won. Although global inflation has decelerated from the record highs of 2022, inflation in the US, the UK and the EU is still higher than the 2% target that central banks in these economies consider to be the ideal rate of inflation. This increases the possibility of central banks in Africa and around the world – especially the closely watched US Federal Reserve – maintaining the prevailing high interest rates for the foreseeable future. The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, expects inflation in several countries to remain above target until 2025. Speaking in October in Abidjan, Côte d’Ivoire, she urged central banks to avoid prematurely easing monetary policy in light of sticky inflation.