The International Monetary Fund (IMF) has revised and lowered its 2025 economic growth forecast for Africa to 3.9% from the previous 4.2%.
This adjustment is as a result of the multiple global shocks, particularly the tariffs implemented by U.S. President Donald Trump.
The tariffs have disrupted trade flows and heightened economic uncertainty across the continent. According to a spokesperson from the IMF, “the new economic measures will likely increase inequality”.
The IMF has expressed its concern that these tariffs could undermine the progress African nations have made in reducing inflation and stabilizing public debt.
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‘’The strong policy actions that have been taken to bring down inflation, stabilize public debt, and reduce external imbalances risk being undone in the face of further shocks,’’ the statement said.
The tariffs, for instance, threaten the benefits of the African Growth and Opportunity Act (AGOA), a U.S. trade initiative providing duty-free access to American markets for eligible African countries. With AGOA set to expire in September 2025, the likelihood of its renewal is uncertain.
Countries like South Africa ad Kenya have been significantly impacted. South Africa, facing a 30% tariff on exports, is seeking exemptions and exploring alternative markets. Meanwhile, Kenya is leveraging its relatively lower tariff rate to strengthen its position in the U.S. market, particularly in textiles, while also aiming to expand its manufacturing base.
The IMF remains committed to supporting African countries through policy advice and capacity development, particularly in adapting to global economic shifts and technological advancements.
The IMF recommends that African nations intensify domestic reforms to promote fiscal sustainability and enhance economic integration through initiatives like the African Continental Free Trade Agreement (AfCFTA). With this agreement, they can boost intra-African trade by reducing tariffs and addressing non-tariff barriers, potentially increasing the continent’s GDP by $450 billion by 2035.
