5 African countries with the lowest interest rates

The economies of African countries have been doing pretty well and some have been getting into the top 10 fastest-growing economies in the world. Businesses in those countries must be moving well to support those growths. Interest rates are the drivers of borrowing and when businesses can borrow, they are able to expand.

Today, we present the five African countries with the lowest interest rates. A number of factors including the strength of the economy, inflation, riskiness of the borrower, period of the loan and tax treatment of the interest among others determine interest rates. We shall not delve into that as that is in another yet-to-be-published article.

So which countries have the lowest interest rates in Africa and what are their economies based on?

Seychelles

Are you surprised? Well, don’t be. Seychelles is an archipelago of 115 islands in the Indian Ocean, around East Africa. Home to numerous beaches, coral reefs and nature reserves, the country is also home to some rare animals such as the giant Aldabra tortoises. Seychelles had a Gross Domestic Product of USD 1.454 billion as of 2021.

The country has the lowest interest rates in Africa as of February 2023. You can borrow money with interest as low as 2% in Seychelles as of February 2023.

Botswana

Yes, Botswana is the second country in Africa with the lowest interest rates. A country that has its landscape defined by the Kalahari Desert and the Okavango Delta, Botswana is a landlocked county in Southern Africa. With a population of about 2.65 million, the country had a Gross Domestic Product, GDP of USD 17.61 billion in 2021. Noted for its diamonds, the country is hugely supported by the industrial sector which is led by diamond processing, food processing, textiles and mining. The sector employs about 17.6% of the country’s labour force. The sector trails just the service sector which is the country’s leading contributor to GDP with 65.1% while employing 62.4% according to 2020 World Bank data.

Botswana has an interest rate of 2.65% as of February 2023.

Algeria

A country that has the Mediterranean sea and the Sahara desert as part of it, Algeria has an estimated population of about 45.99 million as of 2023. The country is seeing its economy recover with oil production moving back to pre-pandemic levels. It is also expected to be a major gas import destination for European countries following the continent’s standoff with Russia due to its invasion of Ukraine. With one of the largest GDPs in North Africa, Algeria’s GDP as of 2021 was estimated to be USD 163 billion.

Algeria has the joint-third lowest interest rate in Africa with 3% in February 2023. Borrowing from there must be fun.

Libya

Oh yes, Libya. Do you remember the place that youth from many African countries so much wanted to visit a couple of years back? Some even still do and do it through the desert. You can borrow money there with one of the lowest interest in Africa. A country naturally clothed in the Sahara desert, the country is home to oil production and though the production quantities were reduced, it got back up to 1.2 million barrels per day(BPD) in 2022 as it targeted 2 million BPD. The North African country had a GDP of USD 42.82 billion in 2021. The petroleum sector provides about 95% of the country’s export earnings and contributes over 60% to the GDP.

You can borrow money in Libya for just 3% interest.

Morocco

Another North African country on the list. Morocco just like the other countries in this list that are from North Africa is an oil-producing country, however, at very marginal levels. The country is bordered by the Atlantic Ocean and the Mediterranean Sea. It is heavily supported by the service sector which contributes 51.55% to the GDP and is closely followed by industry with 26.08% and agriculture with 12.04%. Morocco’s GDP is estimated to be USD 142.9 billion as of 2021.

With that noted, now let me tell you that you can borrow money in Morocco for as low as 3% according to data gathered for February 2023 by Take-Profit.org.

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