INFLATION DYNAMICS AND ECONOMIC GROWTH IN DEVELOPING ECONOMIES: EVIDENCE FROM KENYA, NIGERIA, ETHIOPIA, AND GHANA (2008-2024)
Stephen A. Orina, Dr. Yasin Ghabon
1.School of Business & Economics, Finance Department, Maseno University, 2.School of Business & Economics, Economics Department, Maseno University, Kenya
Abstract
The paper explores the dynamics of inflation, and its association with economic growth in four of the African developing economies- Kenya, Nigeria, Ethiopia and Ghana, during the period of 2008-2024. The work combines qualitative research with the descriptive data using Monetarist and Keynesian but then moving on to Structuralist, Threshold and Open- economy theories. Through the World Bank annual CPI data and annual reports by the central banks, the paper demonstrates that inflation in such economies is multidimensional and it can be assessed with regard to the news on growth in monetary, fiscal deficit factors, exchange-rate pass-through factors, supply and global commodity shock bottlenecks. Comparative country experience suggests that there were substantial divergences: Kenya had been fairly stable under an inflation-targeting regime, and Nigeria had continuously high inflation rates due to fiscal dominance and exchange-rate instability. Ethiopia had extreme volatility in regards to agricultural boundaries and political interference and Ghana had extremely high inflation that was mainly as a result of currency depreciation and fiscal pressure. The conceptual framework developed demonstrates how these drivers are inputs to the inflation dynamics-quantified in level, volatility, and persistence-and how they impact growth through those channels as investment, consumption, competitiveness, and financial stability. The paper concludes that moderate inflation is compatible with growth, whereas the high double-digit or volatile inflation will harm the macroeconomic stability. Policy prescriptions emphasize monetary credibility, fiscal discipline, structural reforms and selective social protection.
Keywords: Inflation dynamics; Economic growth; Developing economies; Fiscal policy
Journal Name :
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EPRA International Journal of Economics, Business and Management Studies (EBMS)
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Published on : 2025-10-07
| Vol | : | 12 |
| Issue | : | 10 |
| Month | : | October |
| Year | : | 2025 |