LAST WEEK IN AFRICA: Dollar Alternative Grows, South Africa Inflation Stable & Nigeria’s Prices Ease

Africa Expands Non-Dollar Payments System
Africa is scaling back its reliance on the U.S. dollar through the Pan-African Payments and Settlements System (PAPSS), now operational in 15 countries and 150 banks. By enabling direct currency exchanges between African nations, PAPSS cuts transaction costs from as high as 30% to just around 1%, potentially saving the continent up to $5 billion annually in hard currency expenditures.

South Africa’s Inflation Holds Steady at 2.8%
South Africa’s annual inflation rate remained unchanged at 2.8% in May 2025, maintaining April’s level and staying well within the South African Reserve Bank’s 3–6% target range. Core inflation also held steady at 3.0%. The continued price stability has sparked policy discussions around potentially lowering the inflation target to enhance long-term competitiveness.

Nigeria’s Inflation Declines to 22.97% in May
Nigeria’s inflation slowed for the second consecutive month, dropping from 23.71% in April to 22.97% in May 2025. According to the National Bureau of Statistics, the decline was supported by easing food inflation, which fell slightly to 21.14%. Although inflation remains elevated, the trend provides cautious optimism for ongoing monetary policy efforts to stabilize prices amid currency pressures and subsidy reforms.