Nexus between geopolitical uncertainty and inflation rates in emerging economies in Sub-Saharan Africa

Abstract

This study investigates how global geopolitical uncertainty influences inflationary dynamics in emerging economies of Sub-Saharan Africa (SSA), offering insights into the region’s integration and vulnerability within the global economic system. We ask: To what extent does global geopolitical uncertainty shape inflation in SSA, and what does this reveal about the region’s exposure to external shocks in a globalized world? Using Wavelet Coherence and Quantile-on-Quantile Regression (QQR), we analyse monthly data from 17 SSA economies spanning January 2016 to September 2024. Our findings reveal asymmetric and time-varying impacts of geopolitical risk on inflation, with significant cross-country differences based on economic structure, policy capacity, and reliance on external markets. For instance, in Angola and Malawi, moderate geopolitical shocks exacerbate inflation, while in countries like Benin and Zimbabwe, strong shocks are absorbed with relative resilience. Wavelet findings further demonstrate varying transmission intensities over short-, medium-, and long-term horizons, underscoring the importance of frequency-sensitive policy responses. These results highlight the relevance of building economic resilience through regional integration, diversified trade partnerships, and targeted monetary frameworks. By focusing on a geopolitically sensitive and economically diverse region, this paper contributes to the broader literature on globalization, macroeconomic vulnerability, and the transmission of global risks to local economic conditions.