The IMF says growth across sub-Saharan Africa will be eased to 3.8% in 2025 and 4.2% in 2026.
Speaking to the press during the IMF/World Bank spring meeting in Washington, DC, Amro Aemro Selassie, director of the fund's Africa division, said that despite “promising growth in 2024”, the outlook for 2025 and 2026 is driven by difficult external conditions, weak external demand from overseas, soft commodity prices, and Tighter Financial Markets.
The African-specific update follows the pessimistic global economy outlook that global growth fell earlier this week.
With official development aid expected to drop even further, the IMF noted that more stakes will be placed in vulnerable populations in sub-Saharan Africa.
However, the report states that despite some countries continuing to tackle price pressures, there is some easing inflationary pressure across the region, requiring stricter financial and fiscal policies to be applied.
The importance of private sector growth
The IMF suggested that African countries will pursue reforms that will promote growth, promote regional integration, reduce borrowing costs and reduce high debt levels.
The IMF also recommended a change in direction from growth driven by public investment to what the private sector is the engine of growth.
The IMF highlighted the bulging of young people in the region, noting that youth population and demographic transitions are an advantage.
Sub-Saharan Africa region “will be the main source of labor, progressive investment and consumption demand for the next few decades,” Ceracy told the press.
Recognizing the continued efforts to expand social protection to help vulnerable people, Ceracy noted that “society can be done in social protection.”
In response to questions about ongoing reforms in Nigeria, he said he was impressed with the reforms Nigeria has implemented, even if he stressed that Nigeria could do more to ensure transparency and careful borrowing in the oil sector.
He also praised the priority attention the Nigerian government is giving to providing accurate and transparent data, emphasizing that “we cannot make good policies without good data.”
