Keeping prices stable is still a major issue in Sub-Saharan Africa (SSA). Many economies in the region struggle with rising prices, unpredictable exchange rates, and weak connections between monetary policy and the real economy. Most studies so far have focused on how inflation behaves, but there has not been much attention paid to how stubborn prices are, what causes this, and asymmetries of price rigidity across SSA countries. This study aims to fill that gap by examining price rigidity in Nigeria, South Africa, Ghana, and Namibia using monthly data from 2007 to 2024. Our employs an AR (1) model to measure inflation persistence, while Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models are used to investigate the linear and asymmetric effects of exchange rate volatility, interest rates, and oil prices on inflation dynamics. The findings reveal that inflation tends to stick around for a long time in all the countries examined, with Nigeria exhibiting the highest degree of rigidity. The study further shows that changes in exchange rates, interest rates, and oil prices play a major role in shaping inflation, but these effects vary across countries. The results further show asymmetric price adjustment, whereby inflation responds more strongly to adverse shocks such as currency depreciation and oil price increases than to favorable shocks. The study identifies several reasons for this stubborn inflation, including rigidities in the economic structure, institutional weaknesses, and vulnerability to outside shocks. To help address these issues, the study recommends making monetary policy more credible, managing exchange rates more effectively, developing stronger financial markets, and implementing structural reforms that enhance price flexibility and macroeconomic resilience.
JEL: C22, E31, E52, F31, O55
Keywords: Price Rigidity, Sub-Saharan Africa, Inflation Persistence, Oil Price Shocks, Monetary Policy Transmission, Asymmetric Adjustment.
Citation: Chukwu, C. et al., (2026). Macroeconomic Drivers of Price Rigidity in Sub-Saharan Africa. What do we know? . J Business & Eco Insights.,2(3):1-18.
DOI : https://doi.org/10.47485/3143-5807.1025