IMF Africa Deputy Chief Visits East Africa & Talks Sub-Saharan Africa Economic Prospects

The International Monetary Fund (IMF) recently launched its Regional Economic Outlook for Sub-Saharan Africa in Tanzania, highlighting the economic prospects for the continent. The report revealed that the forecasted growth for Africa in 2025 is expected to reach 3.8 per cent, signaling a challenging environment for economic activity on the continent. CNBC Africa's Aby Agina conducted an exclusive interview with Catherine Pattillo, Deputy Director of the IMF's African Department, shedding light on the current economic landscape in Africa. Pattillo emphasized the significant impact of global policy uncertainty on the region's economic outlook, posing a test to the hard-won recovery that was underway. The report attributes the moderation in growth to tighter global financial conditions, softer commodity prices, and subdued global demand. Despite these challenges, there are pockets of resilience in some African countries where growth is exceeding expectations, with 11 of the 20 fastest-growing countries in the world situated in sub-Saharan Africa for 2025. In the face of global uncertainties, countries in Africa are encouraged to prioritize macro-stability as the foundation for growth and productivity. This involves reducing inflation, stabilizing debt, improving fiscal balances, and strengthening external buffers. Beyond macro-stability, countries need to focus on enhancing productivity by improving the business climate, ensuring access to foreign exchange, enhancing regulations and governance, and promoting regional trade integration. When assessing the progress of specific countries in Africa, Pattillo provided insights on Ethiopia, the Democratic Republic of Congo (DRC), and Kenya. In Ethiopia, the IMF is supporting the country's homegrown reform agenda to address macro-imbalances, restore debt sustainability, and facilitate private sector-led growth. Progress has been made in addressing foreign exchange shortages and enhancing debt restructuring efforts. Similarly, DRC's new fund-supported program aims to maintain macro stability, improve the business climate, and enhance governance to drive inclusive growth. In Kenya, despite strengths in the external sector, challenges persist on the fiscal front, necessitating continued engagement and support from the IMF. Amidst the uncertain economic landscape in Africa, the IMF's Regional Economic Outlook provides valuable insights for policymakers, governments, and stakeholders to navigate the challenges ahead. By focusing on macro-stability, productivity enhancement, and regional integration, African countries can strive towards sustainable economic growth and resilience in the face of global uncertainties.