Africa Ministers, Central Bank Governors, IMF take stock to chart a course for African continent

IMF, African Ministers and Governors have met at the ongoing IMF World Bank Annual Meetings to take stock of current economic conditions and prospective developments for the African continent and chart a course ahead for the region. They said that the global economic environment remains challenging, with growth projected to ease from 3.3 per cent in 2024 to around 3.2 per cent in 2025 amid persistent headwinds from rising protectionism, policy uncertainty, and geopolitical tensions. Inflation pressures and tight global financing conditions continue to weigh on fiscal positions and debt dynamics across many economies, with climate shocks adding further complexity to the challenges the African continent faces. According to IMF “despite this difficult global context, Africa’s growth remains resilient and is projected at 4.2 per cent for 2025, the same as in 2024, supported by easing inflation, stronger macroeconomic policies, and ongoing reforms. Debt levels have stabilized at around 65 percent of GDP, and inflation is declining to an average of about 4 percent. However, vulnerabilities remain significant. In many low-income countries (LICs), interest payments absorb about 15 percent of revenues, while external financing is constrained by high borrowing costs and declining official aid. Fragile and conflict-affected states face particularly acute challenges, and per capita incomes in many countries have yet to recover to pre-pandemic levels.
“The African Caucus reaffirmed its commitment to safeguarding macroeconomic and financial stability while advancing policies that enhance living standards through improved access to social services, job creation, and the promotion of sustainable growth. Strengthening domestic resource mobilization remains a central priority, supported by governance reforms to improve public financial management, enhance fiscal transparency, and boost accountability. Efforts to digitalize tax systems and broaden the tax base will help expand revenue, while measures to raise spending efficiency will ensure that public resources deliver maximum impact. Medium-term fiscal strategies will aim to balance consolidation with growth and create space for priority investments, complemented by structural reforms to foster private-sector development, deepen trade integration, and generate jobs. Building resilience to climate shocks is also essential, as extreme weather events are already reducing output by 1–2 percentage points annually in the most vulnerable economies.
“The recently approved reform of the Poverty Reduction and Growth Trust (PRGT) has strengthened the Fund’s capacity to provide concessional lending, with new commitments projected to average SDR 5.2 billion (US$7.1 billion) per year and the granting of zero-interest loans to the poorest IMF member countries. The Resilience and Sustainability Trust (RST) is providing longer-term affordable financing to help countries address structural challenges, strengthen pandemic preparedness, and build climate resilience, with 26 programs approved to date—nearly half in Africa. We encourage continued efforts to ensure that the PRGT and RST are adequately resourced to meet the region’s growing needs.
“Amid heightened global uncertainty, the IMF will continue to adapt its lending toolkit and policy advice to support its member countries more effectively navigate evolving challenges. The Fund is strongly committed to its African members, working with these nations to build fiscal space for scaled up infrastructure and human capital spending, strengthen institutional capacity and resilience, and accelerate progress toward the region’s legitimate development aspirations.”