IMF & World Bank predict 4 to 4.2% growth in SSA in 2025

Sub-Saharan Africa is stepping into the year 2025 with a sense of cautious optimism, as forecasted by the International Monetary Fund (IMF) and the World Bank. The region is expected to experience a GDP growth ranging between 4 per cent to 4.2 per cent, which is considered a positive outlook compared to previous years, especially since the impact of the COVID-19 pandemic. This growth projection sets the stage for various opportunities and challenges that lie ahead for the African economies. According to Agnes Gitau, the Executive Director at the Eastern Africa Association, key themes that will shape the region's economic landscape include geopolitics, digital and telecom investments, opportunities in the agriculture sector, democracy, and socio-economic inclusion. Leveraging the positive economic projections can lead to attracting more Foreign Direct Investment (FDI) into the region, thereby fostering economic growth and development. East Africa emerges as a frontrunner in the growth trajectory with countries like Rwanda, Ethiopia, Uganda, and Tanzania projected to achieve growth rates above 6 per cent. The region's growth is attributed to infrastructure development, a booming agriculture sector, and a rebound in tourism post-COVID-19. Notable economic reforms in countries like Ethiopia and Tanzania, including the launch of the Ethiopia Stock Exchange, are key drivers of growth in the region. Standing out in West Africa, Ivory Coast leads the growth at 6 per cent, while Nigeria and South Africa, the region's largest economies, are expected to demonstrate modest growth following notable reforms by their respective administrations. The economic stability in these countries has boosted investor confidence, contributing to a positive outlook for the sub-Saharan Africa region. Despite the optimistic growth projections, several risks still loom over the continent. African leaders must address issues such as debt distress, high cost of financing, safety, and security concerns impacting both investments and citizens, as well as the upcoming African Union elections in February. The continuity of the continental developmental agenda under new leadership and the African seat in the G20 presidency present opportunities for the continent to push forward key agendas around trade, climate crisis, and access to finance. Additionally, the changing political landscape in major global economies like the United States, Canada, and the United Kingdom under new leadership could have implications for African economies. The uncertainty surrounding the foreign policy of the U.S., particularly with the presidency of Donald Trump, and potential tariff threats from major economies like China and Europe necessitate African policymakers to strategically leverage geopolitical shifts to promote market access and partnerships for sustainable development. Despite the challenges and uncertainties, the positive growth outlook for sub-Saharan Africa in 2025 offers a beacon of hope for the region's economic advancement and global partnerships.