This study investigates the impact of interest rates on inflation across seven Sub- Sahara African countries from 2000 to 2023, employing a dynamic panel data approach. The study employed cross-sectional dependence tests, second-generation panel unit root tests (CIPS), Pedroni cointegration, and Vector Error Correction Model (VECM) to analyses the short-run and long-run dynamics. The correlation results show that deposit interest rate has a moderate positive correlation with inflation (0.68), while real interest rate exhibits a negative correlation (-0.53). Short-run VECM estimates indicate that real interest rate negatively affects inflation (-0.303), whereas deposit interest rate (0.488) and broad money supply (0.398) positively influence inflation. The error correction term (-0.146) is statistically significant, indicating that 14.6% of previous period disequilibrium is corrected annually. Long-run cointegrating estimates show that a 1% increase in real interest rate reduces inflation by 1.28%, while a 1% increase in deposit interest rate raises inflation by 3.95%. Broad money supply exerts a positive long-run effect (0.39%). Diagnostic tests confirm no serial correlation, normality of residuals, and homoscedasticity. The findings validate the Fisher effect in the long run while revealing paradoxical short-run dynamics consistent with Neo-Fisherian and cost-channel theories. 

Keywords: Broad Money Supply, Pedroni Cointegration, Deposit Interest Rate, Real Interest Rate, Inflation.