Implications of IMF trimming Africa's growth

The International Monetary Fund (IMF) recently revised its forecast for African economic growth, cutting it by 0.3 percentage points due to various global shocks, including the far-reaching effects of U.S. President Donald Trump's aggressive tariffs worldwide. CNBC Africa welcomed Chad Nyakatura, Money Market And Sales Manager at Stanbic Bank Uganda, to delve deeper into the implications of this adjustment. The IMF's report, released on April 22, 2025, highlighted a global growth decline with associated downside risks, which is poised to have a ripple effect on the African continent. In addition, the report mentioned a slowing down of inflation and a shift in policy direction following the disruptions caused by the U.S. tariffs. The IMF recommended that African countries adopt an accommodative and predictive trade environment to enhance growth and trade balance. Africa, which was experiencing a promising economic rebound post-COVID, now faces a dip in growth prospects. Despite this setback, Nyakatura remains cautiously optimistic, citing past instances of successful debt restructuring that bolstered growth in the long run. He emphasized the importance of a balanced monetary policy and fiscal deficit management by African governments to mitigate the impact of the IMF's forecast. In light of the ongoing trade tariffs imposed by the U.S., African markets have shown resilience amidst initial disruptions. However, countries heavily reliant on exports to the U.S., such as Nigeria and Angola, are likely to face challenges ahead. The Africa Growth and Opportunity Act (AGOA) trade agreement with the U.S. has provided some relief for select African countries, but fluctuations in commodities like oil and copper remain a concern. Market participants are advised to closely monitor the developments and proactively safeguard against potential market fluctuations and trade impacts.