One month on from Russia’s invasion of Ukraine, the spike in oil and commodity prices is piling pressure on import-dependent African countries. Major Ukrainian wheat importer Egypt this week devalued the Pound by 14% and increased its benchmark interest rate for the first time since 2017.
In Ghana, the Cedi nosedived to a fresh record low—taking its 2022 depreciation to 20% against the dollar—and hiked interest rates by a record 2.5 percentage points. Kenya’s Shilling tumbled to an all-time low as inflation pressure builds.
With Ghana’s bonds trading at ‘distressed’ level yields and Egypt requesting additional support from the International Monetary Fund, the crisis looks set to cause further deterioration in Africa’s international debt markets.
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