Investigating the Determinants of Inflation in Leading Economies in Africa: A Panel Data Analysis

Abstract

This paper empirically investigates the determinants of inflation in leading economies in Africa, namely Nigeria, South Africa, and Angola for the period 2001-2020. By applying the techniques of the ordinary least square (OLS) panel regression model and fixed effect model, the study finds out broad money growth, deposit interest rate, and lending interest rate positively significantly affected inflation, whereas exchange rate and exports positively affected inflation but not significantly. On the other hand, gross domestic product growth negatively affected inflation, while real interest rates and imports affected inflation negatively but not significantly.