This is despite persistent global headwinds and fiscal pressures.
Releasing the Fund’s October Regional Economic Outlook at the 2025 Annual Meetings on Thursday, IMF African Department Director Abebe Selassie commended the region’s resilience but warned that policy buffers were being severely tested.
“Six months ago, we noted the region’s strong policy efforts and better-than-expected growth in 2024. However, global conditions have since become more turbulent, with weaker demand, softer commodity prices, and tighter financial markets,” Selassie said.
He noted that while several countries, including Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda, rank among the world’s fastest-growing economies, resource-intensive and conflict-affected states continue to lag behind.
Commodity price trends have diverged, with oil prices falling while those for cocoa, coffee, copper, and gold remain elevated. Though external financing conditions have improved slightly, enabling countries like Kenya and Angola to return to international capital markets, aid flows are declining sharply, leaving low-income and fragile economies particularly exposed.
The IMF highlighted rising debt service costs, inflationary pressures in parts of the region, and shrinking external buffers as key risks. “Rising debt service costs are crowding out development spending, and the shift toward domestic financing is deepening the sovereign-bank nexus,” Selassie cautioned.
The report calls for two urgent policy priorities: boosting domestic revenue and improving debt management. The IMF urged governments to modernise tax systems through digitalisation and better compliance,
while also building public trust and ensuring that tax reforms are equitable.
On debt, Selassie emphasised the need for transparency and stronger public financial management.
“Publishing comprehensive debt data and reinforcing budget oversight are key steps toward reducing borrowing costs and unlocking innovative financing,” he said.
Since 2020, the IMF has disbursed nearly $69 billion to sub-Saharan Africa, including $4 billion so far this year. Selassie reaffirmed the Fund’s commitment to support the region’s reform and recovery efforts, saying the aim is to “build resilience and support inclusive, sustainable growth.”
–IMF/ChannelAfrica–
