Inflation in African Countries
Inflation in African Countries

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1989-10-19

Total Pages: 22

ISBN-13: 1451953658

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Since the mid-1970s the annual inflation rate in Africa has averaged more than 15 percent, with many countries experiencing rates of 20 percent or more. Inflation rates of this magnitude have significant adverse effects on the financial sectors of African countries, particularly in the context of fixed nominal interest rates. Econometric analysis points strongly to monetary expansion as a major cause of inflation in African countries generally. Exchange rate depreciation is also associated with higher inflation, although in some countries the domestic currency was depreciated to offset the effects of recent inflation, rather than being a cause of inflation.

Inflation in African Countries
Inflation in African Countries

Author: Joshua Eli Greene

Publisher:

Published: 2006

Total Pages: 25

ISBN-13:

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Since the mid-1970s the annual inflation rate in Africa has averaged more than 15 percent, with many countries experiencing rates of 20 percent or more. Inflation rates of this magnitude have significant adverse effects on the financial sectors of African countries, particularly in the context of fixed nominal interest rates. Econometric analysis points strongly to monetary expansion as a major cause of inflation in African countries generally. Exchange rate depreciation is also associated with higher inflation, although in some countries the domestic currency was depreciated to offset the effects of recent inflation, rather than being a cause of inflation.

Food Inflation in Sub-Saharan Africa
Food Inflation in Sub-Saharan Africa

Author: Mr.Emre Alper

Publisher: International Monetary Fund

Published: 2016-12-22

Total Pages: 40

ISBN-13: 1475563116

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This paper analyzes food inflation trends in Sub-Saharan Africa (SSA) from 2000 to 2016 using two novel datasets of disaggregated CPI baskets. Average food inflation is higher, more volatile, and similarly persistent as non-food non-fuel (NF/NF) inflation, especially in low-income countries (LICs) in SSA. We find evidence that food inflation became less persistent from 2009 onwards, related to recent improvements in monetary policy frameworks. We also find that high food prices are driven mainly by non-tradable food in SSA and there is incomplete pass-through from world food and fuel prices and exchange rates to domestic food prices. Taken together, these finding suggest that central banks in low-income countries with high and persistent food inflation should continue to pay attention to headline inflation to anchor inflation expectations. Other policy levers include reducing tariffs and improving storage and transport infrastructure to reduce food pressures.

Africa's Rising Inflation
Africa's Rising Inflation

Author: Ajay Chhibber

Publisher: World Bank Publications

Published: 1991

Total Pages: 35

ISBN-13:

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Is there a link between devaluation and high inflation? It depends on accompanying monetary and fiscal policies and the presence of parallel markets. An open capital account would curtail fiscal profligacy and provide price stability without jeopardizing growth.

On the Drivers of Inflation in Sub-Saharan Africa
On the Drivers of Inflation in Sub-Saharan Africa

Author: Anh D. M. Nguyen

Publisher: International Monetary Fund

Published: 2015-08-05

Total Pages: 28

ISBN-13: 1513524801

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The perception that inflation dynamics in Sub-Saharan Africa (SSA) are driven by supply shocks implies a limited role for monetary policy in influencing inflation in the short run. SSA’s rapid growth, its integration with the global economy, changes in the policy frameworks, among others, in the last decade suggest that the drivers of inflation may have changed. We quantitatively analyze inflation dynamics in SSA using a Global VAR model, which incorporates trade and financial linkages among economies, as well as the role of regional and global demand and inflationary spillovers. We find that in the past 25 years, the main drivers of inflation have been domestic supply shocks and shocks to exchange rate and monetary variables; but that, in recent years, the contribution of these shocks to inflation has fallen. Domestic demand pressures as well as global shocks, and particularly shocks to output, however, have played a larger role in driving inflation over the last decade. We also show that country characteristics matter—the extent of oil and food imports, vulnerability to weather shocks, economic importance of agriculture, trade openness and policy regime, among others, help in explaining the role of shocks.

Monetary Policy in Sub-Saharan Africa
Monetary Policy in Sub-Saharan Africa

Author: Andrew Berg

Publisher: Oxford University Press

Published: 2018-04-27

Total Pages: 474

ISBN-13: 019878581X

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Low-income countries in sub-Saharan Africa present unique monetary policy challenges, from the high share of volatile food in consumption to underdeveloped financial markets. This book draws on the International Monetary Fund's research and practice to uncover how monetary policy in this region currently operates, and what changes should be made.

Monetary Growth and Exchange Rate Depreciation As Causes of Inflation in African Countries
Monetary Growth and Exchange Rate Depreciation As Causes of Inflation in African Countries

Author: Mr.Elie Canetti

Publisher: International Monetary Fund

Published: 1991-07

Total Pages: 58

ISBN-13:

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This paper examines the relative importance of monetary growth and exchange rate depreciation as causes of inflation in a sample of 10 Sub-Saharan African countries. Causality tests and impulse response functions derived from vector autoregression (VAR) analysis suggest that both monetary expansion and exchange rate adjustments cause inflation in a number of these countries. However, the failure of the tests to attribute the bulk of the variance in inflation in most of the countries to either variable suggests either a problem with the statistical technique or that some other factor--perhaps structural bottlenecks or a measure of overall macroeconomic policy stance incorporating both monetary and exchange rate policy--may be even more important as a determinant of inflation in African countries.

Inflation Dynamics in the CEMAC Region
Inflation Dynamics in the CEMAC Region

Author: Carlos Caceres

Publisher: International Monetary Fund

Published: 2011-10-01

Total Pages: 31

ISBN-13: 1463921969

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This paper analyses inflation dynamics in the Central African Economic and Monetary Community (CEMAC) using a constructed dataset for country-specific commodity price indices and panel cointegrated vector autoregressive (VAR) models. Imported commodity price shocks are significant in explaining inflation in the region. Governments are another driving force of inflation dynamics mainly through controlled prices and the role of capital expenditure in domestic activity. In most CEMAC countries, the largest effect of global food and fuel prices occurs after four or five quarters in noncore inflation and then decays substantially over time. Second-round effects are significant only in Cameroon and to a lesser extent in the Republic of Congo.