‘Africa to defy global turmoil with 4.2% GDP growth by 2027’ - The Nation Newspaper (2025)

April 14, 2025 by Ekaete Bassey

Despite an unsteady global economy and intensifying geopolitical risks, Africa is poised to chart a new economic course, with real Gross Domestic Product (GDP) expected to rise steadily from 4.0 per cent in 2025, reaching 4.1 per cent in 2016, to 4.2 per cent by 2027.

This is according to the 2025 African Trade and Economic Outlook (ATEO) latest report released by the African Export-Import Bank (Afreximbank).

The report presents a bold and cautiously optimistic view of Africa’s economic future, asserting that 41 per cent of African economies are projected to grow by at least five per cent, nearly double the global average of 21 per cent. This, the report said, signals a shift in the global economic landscape, with Africa moving from the periphery to the centre.

According to the report, Africa’s growth trajectory will be fuelled by rising global demand for its exports, a declining inflation trend across key markets, and structural reforms aimed at reducing overreliance on commodities.

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However, the report does not shy away from highlighting critical threats. From internal conflicts and debt overhangs to climate disruptions and the economic slowdown in the United States and China, downside risks remain significant.

“Internal conflicts and climate change threaten stability and growth,” the report warned.

“Economic slowdown in the United States and China may also impact international financial conditions and the demand for African resources.”

The report also sounded the alarm on debt sustainability, revealing that several African countries allocate over 50 per cent of their revenues to debt servicing. This trend, it said, could hinder long-term development unless addressed urgently.

“To ensure debt sustainability, African governments must prioritise efficient public spending and channel resources into high-impact, growth-oriented projects,” the report recommended.

Yet, amid these concerns, Afreximbank believes the continent is not without powerful levers for transformation. One of the most promising is the African Continental Free Trade Area (AfCFTA), which the report describes as a “game changer.”

According to the anticipated decline in global interest rates from 2025, assuming geopolitical stability, could also ease access to global capital markets and lower the cost of financing infrastructure and development projects.

To navigate immediate challenges, the ATEO recommends that African countries adopt a proactive monetary stance, strengthen climate and conflict resilience mechanisms, and stimulate domestic consumption and services-led growth. Over the medium term, the focus should shift to diversifying economies through investment in science, technology, and human capital development.

“Strengthening training in sciences and technology facilitates skill development and talent allocation, which is essential for successful structural transformation,” the report noted.

Addressing weak social outcomes of economic growth is also key, with the report pointing to sluggish poverty reduction despite rising GDP.

“To boost poverty-reducing potential growth, improving the provision of basic public infrastructure and services is vital,” the report said.

“Reducing dependency on natural resources through structural transformation and ensuring equitable access to education, healthcare, and financial services are essential.”

On the environment, Afreximbank warns of escalating climate risks that threaten long-term prosperity.

“For sustainable economic development, promotion of green growth must align with comprehensive policy frameworks that address climate change adaptation and mitigation,” the report advised.

The 2025 ATEO paints a complex but hopeful picture of a continent at a pivotal crossroads. With the right mix of strategic investments, reforms, and cooperation, the report concludes, Africa’s economic transformation is not only possible but already underway.

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