Higher inflation and interest rates tend to discourage investment and economic activity, according to a report by Moody's, one of the world's credit rating agencies.

The report notes that since the outbreak of the Russian-Ukrainian conflict, inflation has risen sharply in several countries around the world, far exceeding most expectations. Many African countries are struggling with rising prices due mainly to higher food and energy prices. In response, central banks have raised their key interest rates in an attempt to suppress demand.

In 2023, Moody's forecast real GDP growth of 4 per cent in Nigeria, 4.5 per cent in Egypt, 1.5 per cent in South Africa, 3.5 per cent in Morocco and 5.3 per cent in Kenya. However, the rating agency noted that interest rate increases have so far not kept pace with inflation, adding thatin Egypt, Nigeria, Morocco and South Africa, real (non-inflationary) interest rates have remained negative as in many parts of the world.