Several sub-Saharan African economies are experiencing renewed economic momentum in 2025 as currency appreciation against the US dollar helps ease inflationary pressures and spur private sector growth. Data from S&P Global’s Purchasing Managers’ Index (PMI®) surveys, supported by anecdotal evidence from local businesses, show how strengthening local currencies are reshaping the region’s economic landscape.

Over the course of 2025, five of the seven economies tracked by S&P Global in sub-Saharan Africa have seen their currencies appreciate against the dollar. The trend partly reflects the dollar’s relative weakness this year, but also domestic factors such as tighter monetary policies, fiscal reforms, and support from IMF programmes. The Ghanaian cedi and Zambian kwacha have led the pack, each appreciating by about 15% so far, while the South African rand and Nigerian naira have also posted notable gains.

Currency Strength Brings Inflation Relief

The region’s stronger currencies are easing the cost burden on businesses, contributing to a slowdown in inflation. According to PMI data, input costs in September rose at the slowest pace since the COVID-19 pandemic. Selling price inflation also remained subdued, among the weakest recorded in five years.

Country-level data underline this improvement. Ghana and Zambia — the two economies with the strongest currency appreciation — have seen outright declines in purchase prices, an unusual development in sub-Saharan Africa, where inflationary pressures are typically high. Even Nigeria, which continues to grapple with elevated price growth, recorded its weakest inflation rate since early 2020.

Survey feedback from businesses further illustrates the shift. Traditionally, firms cite exchange rate fluctuations as a driver of rising costs, particularly when local currencies weaken against the dollar. But between June and August this year, a reversal occurred: more respondents reported exchange rates helping to reduce purchase prices rather than increase them. This marks the first time such a trend has been observed across all seven sub-Saharan African PMI surveys.


Central Banks Respond with Rate Cuts

Falling inflation has given monetary authorities across much of the region room to ease policy rates. Of the seven economies covered, five have lowered interest rates since the start of 2025. Ghana’s central bank has been the most aggressive, cutting its benchmark rate by a cumulative 650 basis points over its last two meetings. Uganda has maintained its rate steady, while Zambia remains the outlier, having raised rates earlier in the year — though analysts at S&P Global Market Intelligence anticipate a cut of 50 to 100 basis points in November.

Business Activity Expands Across the Region

The easing inflationary environment has fueled stronger business activity across the private sector. In September, overall output in sub-Saharan Africa grew at its fastest pace in five months, supported by higher new orders, increased employment, and stronger inventory accumulation.

Zambia stood out, with the Stanbic Bank Zambia PMI showing the most robust rise in business activity since mid-2023. Kenya also returned to growth following disruptions earlier in the year linked to political protests. Ghana was the only economy to record a marginal contraction in output, but new orders continued to grow, suggesting a rebound could be imminent.

Outlook: Currencies Powering Growth

As 2025 heads into its final quarter, sub-Saharan Africa’s private sector appears to be on a firmer footing. Currency appreciation has not only tamed inflation but also provided central banks with policy flexibility to support expansion. With business confidence holding steady and external conditions improving, the region’s economies may be better positioned to sustain their recovery — a rare alignment of currency strength, policy easing, and private sector dynamism in recent years.