Africa’s economic growth forecast for 2025 has been lowered to 3.9%, as global trade tensions, policy uncertainty, and capital costs intensify pressure on the continent.
The African Export-Import Bank’s July 2025 report highlights slowing merchandise trade, elevated U.S. tariffs, and monetary divergence as key drags. Despite this, 21 African economies are still projected to exceed 5% growth, driven by reforms and improved macroeconomic management.
Inflation is expected to ease to 13.8% in 2025, potentially reaching single digits by 2026—the first post-pandemic milestone. Improved weather conditions have bolstered food supplies, aiding disinflation. Ghana’s inflation fell to 13.7% in June, a three-year low, supported by food price drops and cedi strength. Conversely, Ethiopia and Nigeria grapple with double-digit inflation due to currency weakness and structural issues.
Currency performance remains split. Nearly half of African currencies depreciated against the dollar in June 2025, yet Ghana, South Africa, and Rwanda saw modest gains. Ghana’s cedi rose 1% monthly, even as the Bank of Ghana cut rates by 300 basis points to 25%, citing anchored inflation expectations.
Trade data shows resilience: Africa’s total trade reached $130 billion in March 2025, with intra-African trade up 7.7% yearly. However, falling commodity prices and weak external demand threaten to widen current account deficits to 2.6% of GDP by 2026. Credit upgrades for Ghana, Nigeria, Zambia, and Togo signal improving market confidence, though tighter global financial conditions constrain capital access for many.
Regional disparities define the outlook:
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West Africa: Senegal and Côte d’Ivoire outperform, while Ghana and Nigeria face exchange rate volatility.
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East Africa: Robust growth in Uganda, Rwanda, and Tanzania contrasts with persistent inflation.
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Southern Africa: Zimbabwe rebounds strongly (6% GDP growth), but South Africa’s recovery lags.
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Central/North Africa: Cameroon and Congo show stability; Egypt battles high inflation and currency swings.
Afreximbank urges coordinated fiscal-monetary policies, structural reforms, and accelerated AfCFTA trade integration to mitigate external shocks. “Africa’s growth narrative is resilient but not immune,” the report concludes, emphasizing competitiveness and export diversification as critical shields.
