What will drive Africa's economic & market growth in 2025?

A recent report by Sterling Asset Management and Trustees has shed light on the growth expectations for African economies in 2025. Despite the positive outlook, the report also highlights potential challenges such as exchange rate fluctuations and supply chain disruptions that may be triggered by negative impacts from global economies. Patrick Ejumedia, Head of Research at Sterling Asset Management and Trustees, discussed these findings in an interview with CNBC Africa, providing valuable insights into the factors that will drive Africa's economic and market growth in the coming year. The report emphasizes the key drivers for African economies and offers a glimpse into the investment opportunities and risks that lie ahead. One of the focal points of the report is the bullish trend in Nigeria's equities market, driven by a recovery in industrial and consumer goods sectors. This positive momentum is supported by Naira stability and expected inflation moderation. Ejumedia expressed optimism about the outlook for inflation, noting that recent data suggests a marginal increase, but forecasts indicate a moderation in the coming months. He pointed out that stable exchange rates and government interventions in the FX market are contributing to Naira stability, which bodes well for the industrial and consumer goods sectors. The prospect of fresh investments, portfolio rebalancing, and upcoming corporate actions further signal a positive start to the year for Nigerian markets. However, Ejumedia also highlighted the need for caution, as market volatility and profit-taking activities have led to sector fluctuations, with the insurance and oil and gas sectors experiencing negative growth. Despite these challenges, the banking and consumer goods sectors are showing resilience, highlighting potential opportunities for investors. Looking beyond Nigeria, Ejumedia discussed the performance of key African markets, including Ghana, and emphasized the importance of assessing macroeconomic indicators to gauge investment potential. He noted a trend of inflation reduction across several African countries, which could attract investors seeking returns and shareholder profits. By evaluating the ASIs of different economies, investors can identify regions poised for growth and market-driving potential in 2025. Geopolitical factors were also cited as influential in shaping market movements, underscoring the interconnected nature of global economies. As African economies navigate the complexities of a changing landscape, strategic insights and an informed approach to investment will be crucial for stakeholders in 2025. The report serves as a roadmap for understanding the opportunities and risks that lie ahead, guiding decision-makers in unlocking the full potential of African markets in the coming year.