The African Export-Import Bank (Afreximbank) has trimmed its outlook for Africa’s economy, warning that persistent trade tensions and volatile commodity markets will weigh on growth even as inflation begins to ease.
According to the bank’s August 2025 macroeconomic report, Africa’s GDP is now expected to expand by 3.9% in 2025, down from earlier projections of 4.1%. Growth should pick up modestly to 4.0% in 2026, supported by reforms and diversification, but global uncertainty is set to keep momentum subdued.
The report points to falling commodity prices and a widening trade deficit as the main risks to fiscal stability and debt sustainability. Africa’s average current account shortfall is projected to increase to 2.6% of GDP in 2025–26, compared with 1.8% last year.
Trade volumes slipped in April, with total flows down to $127.3 billion from $132.6 billion in March, though year-on-year growth remained positive at 4.9%. Intra-African trade also dipped month-on-month but was 14.9% higher than a year earlier, highlighting resilience in regional commerce.
Afreximbank highlighted an uneven recovery across the continent. More than 20 economies, including Ethiopia, Rwanda, Kenya, and Uganda, are forecast to grow above 5% this year, while South Africa, Nigeria, and Egypt face weaker prospects tied to structural challenges and external shocks.
Inflation, which has dogged many African economies since the pandemic, is projected to ease to 13.8% in 2025 and below 10% by 2026, marking the first return to single digits in six years. The improvement is attributed to better food supplies following the climate-related disruptions of 2024. However, exchange rate volatility and fiscal pressures remain elevated in countries such as Ghana, Nigeria, and Egypt.
Credit conditions are showing tentative improvement. Ghana recently secured an upgrade from Fitch after completing debt restructuring, while Côte d’Ivoire, Angola, and Senegal maintained stable outlooks. Several countries, including Egypt and Benin, returned to the Eurobond market this year, taking advantage of lower global rates.
The report also underscored the risks from geopolitical frictions, with U.S. tariff measures and commodity market swings adding further uncertainty to Africa’s medium-term prospects. Afreximbank urged African governments to double down on reforms, fiscal prudence, and regional trade integration to sustain growth momentum.
