By Jean-Pierre
Lower external demand, subdued commodity prices, and tighter financial conditions, with more significant downgrades for commodity exporters and countries with larger trade exposures to the United States are the key turbulent global conditions that will slowdown Sub-Saharan Africa’s economic growth.
The International Monetary Fund (IMF) has revealed in its April regional economic outlook for Sub-Saharan Africa, after four years of crisis, many countries in sub-Saharan Africa are not yet out of the woods. The IMF stated the region faces yet another shock in the form of an abrupt shift in the external economic landscape as governments around the world reorder their policy priorities—including in particular a series of sizable tariff measures by the United States, and countermeasures by trading partners.
“Just when policy efforts began to bear fruit, with regional growth exceeding expectations in 2024, the region’s hard-won recovery was overtaken by a sudden realignment of global priorities, casting a shadow over the outlook,” said Abebe Aemro Selassie, Director of the African Department at IMF, in his introductory remarks during a press briefing.
According to the economic outlook released recently, growth in the region is now expected to ease to 3.8 percent in 2025 and 4.2 percent in 2026, a downward revision of 0.4 percentage point and 0.2 percentage point, respectively.
“In addition to the subdued global outlook, uncertainty surrounding the world economy is exceptionally high, and a further increase in trade tensions or tightening of global financial conditions in advanced economies could weigh on regional confidence and activity, while raising borrowing costs,” noted the Bretton Wood Institution.
Official development assistance inflows into sub-Saharan Africa will likely decline going forward, placing an added burden on the region’s most vulnerable, said the IMF in its latest growth projection.
“These developments arrive against a backdrop of ongoing vulnerabilities, particularly in countries facing a funding squeeze and higher borrowing costs that in many cases is constraining their ability to finance essential services and development needs,” read part of the economic outlook for the region.
Meanwhile, inflationary pressures are easing at the regional level, but several countries continue to grapple with elevated inflation, requiring a tight monetary policy stance and continued support from fiscal policy.
IMF has reminded Sub-Saharan African countries “these uncertain times call for continuous fine-tuning of policies to strike a balance between advancing growth and social development with macroeconomic stability.” The international financial institution adds the times also place an extra premium on building fiscal and external buffers, together with credibility and consistency in policymaking.
In this context, policymakers will need to increasingly draw on their own sources of strength and resilience, and mobilize domestic revenues, improve the efficiency of spending, and strengthen public financial management and fiscal frameworks to lower borrowing costs, noted the IMF.
“Any further increase in trade tensions or tightening of financial conditions in advanced economies could further dampen regional confidence, raise borrowing costs, and delay investment,” said Selassie.
According to the IMF, looking forward, the private sector will need to do much of the heavy lifting to achieve long-term development goals.
