(Ecofin Agency) - Despite some positive surprises, Sub-Saharan Africa faces less vigorous growth forecasts, with necessary reforms in a global environment marked by shifting priorities among world leaders: Amadou Nicolas Racine Sy, economist and advisor to the director of the Africa Department at the International Monetary Fund (IMF), where he has worked for over 24 years, shares his insights on the revised economic outlook for Sub-Saharan Africa in April 2025.

Ecofin Agency: The IMF released its revised growth forecast for Sub-Saharan Africa and Africa as a whole on April 25, 2025. According to the outlook, growth in Sub-Saharan Africa is expected to reach 3.8% in 2025 and 4.2% in 2026. While these figures are below the October 2024 projections, they reflect a slight improvement compared to 2023 and 2024. Why does the IMF consider this growth to still be a challenge, especially when growth in other regions of the world is expected to be weaker?

Amadou Sy: After four years of successive shocks, we were indeed a bit more optimistic for 2025 and 2026. In 2024, the last quarter brought some pleasant surprises in several countries, which allowed us to revise our projections upwards for that year. However, for 2025, we expect a slowdown in regional growth, mainly due to the turbulent global conditions. In particular, the uncertainty surrounding U.S. tariffs is leading to a decline in overall external demand. As a result, we had to revise downward the growth forecasts for the region's key trading partners, such as China and the European Union.

Also, we anticipate a decline in commodity prices, especially oil. This is problematic for oil-exporting countries, although importers could benefit. Finally, we are seeing tighter financial conditions, with a significant increase in sovereign spreads for African countries. This slowdown is problematic because it is below the region’s potential growth, which is estimated to be between 4% and 4.5% on average. This exacerbates poverty and makes it harder for vulnerable populations to escape the poverty cycle. In terms of growth per capita, this slowdown hinders convergence with wealthier countries—a convergence that is crucial for our nations.

Ecofin Agency: These numbers hide disparities, particularly for low-income countries, where growth is expected to reach around 5.8%, in contrast to the global slowdown. Could you explain which countries will be driving this growth, and which ones might face challenges?

Amadou Sy: You’re right. Despite an overall decline, performances vary significantly. Eleven of the twenty fastest-growing economies in 2025 are in Sub-Saharan Africa. In 2024, Niger and Rwanda posted the highest growth rates in the region. Other countries, like Benin, Ethiopia, the Democratic Republic of Congo, Guinea, Senegal, and Uganda, recorded growth above 6%, mainly thanks to diversified economies—except for the DRC and, to a lesser extent, Guinea.

On the other hand, countries with growth below 2% include Botswana, the Central African Republic, Chad, Equatorial Guinea, São Tomé and Príncipe, South Africa, South Sudan, and Zimbabwe. Resource-rich countries, particularly oil exporters, show weak growth. However, there are some positive signs: Nigeria, for instance, reached a growth rate of 3.4% in 2024, thanks to higher oil production and a dynamic services sector. This shows that country-specific performance needs to be analyzed.

Ecofin Agency: About Sub-Saharan Africa, this growth seems insufficient to meet the needs of nearly 900 million people. Moreover, it lacks inclusivity, as the IMF often points out, with gross national income reduced by trade deficits, debt repayments, and returns on invested capital. How does the IMF work with governments to preserve this low added value within local economies?

Amadou Sy: The region needs faster and more inclusive growth to improve living standards, and we believe it is achievable. The IMF is working with governments on three priorities. First, restoring and supporting macroeconomic stability, which is a necessary condition. In environments with high inflation or currency volatility, economic decision-making becomes complicated. This stability must be tailored to each country's imbalances and political constraints.

Second, using fiscal policy as a lever for inclusion. On the revenue side, there is room to increase tax revenues fairly by improving tax administration rather than raising tax rates. On the spending side, it is important to strengthen social protection and public services while prioritizing investments. A medium-term fiscal strategy, backed by a strong institutional framework, can lower the economic and social costs of adjustment.

Third, accelerating structural reforms for sustainable and inclusive growth. The private sector must play a leading role by improving the business climate and governance. For resource-dependent countries like Angola, where 90 to 95% of exports rely on oil, barriers to diversification must be removed. These reforms require communication with parliaments and civil society to ensure effective implementation.

Ecofin Agency: The external sector heavily impacts African economies. After COVID, the war in Ukraine, and now uncertainties surrounding the U.S. presidency, how is the IMF advising countries to deal with global volatility, beyond internal reforms?

Amadou Sy: Our economies are highly vulnerable to external shocks, which policymakers have little control over. We advise reducing macroeconomic vulnerabilities while addressing development needs in a socially and politically acceptable way. It’s a delicate balance. Policymaking must be carefully calibrated, and countries need to build buffers, such as fiscal reserves, even when it’s politically challenging. As a former IMF Managing Director said, "You have to fix the roof while the sun is shining."

Building these safety buffers, for instance by limiting spending during temporary oil revenue booms, is an insurance policy against future shocks. Governments are not alone: the IMF, the World Bank, the African Development Bank, and other partners play a role. But the private sector, including SMEs, must also be mobilized by reducing regulatory barriers. Given rapid population growth and the urgent needs of young people in education and health, accelerating these reforms is critical.

Interview by Idriss Linge