IMF Africa director: Resilient Africa is not immune to headwinds

IMF Africa Director Zeine Zeidane made his debut on Thursday, 15 October, during the release of the October regional economic outlook for Sub-Saharan Africa. He highlighted that the region is projected to grow by 4.5% in both 2026 and 2027, reflecting an improvement of 0.2 percentage points compared to the April forecast. Zeidane cautioned, however, that resilience should not be mistaken for immunity, stating that Africa's growth is "not immune" to headwinds.

Zeidane attributed the region's resilience to reforms in several major economies, such as subsidy and exchange rate reforms in Ethiopia and Nigeria, as well as structural reforms in South Africa. These reforms have helped the region enter the current growth cycle with stronger buffers, resulting in balanced primary and fiscal balances, stabilised debt, low inflation, and improved current accounts.

However, the aggregate picture does not fully reflect the divergences across individual countries. Commodity exporters are benefiting from high oil, copper, and gold prices, while non-resource-intensive economies are experiencing widening external deficits and slowing growth. Median inflation is projected to rise from 3.4% in 2025 to 4.3% this year and 5% next year, driven by increasing fuel, transport, and fertiliser costs.

Fiscal space is tight, with interest payments accounting for around 13% of government revenue, leaving less room for social spending and public investment. Additionally, a projected 12% fall in bilateral aid for the year could further strain the region's ability to withstand shocks.

IMF Managing Director Kristalina Georgieva had previously recommended three priorities for policymakers: protecting vulnerable households efficiently, safeguarding economic stability, and prioritizing growth-enhancing reforms. Zeidane echoed these recommendations, emphasizing the importance of supporting vulnerable populations through targeted social protection, ensuring that commodity windfalls are saved and debt is repaid, and normalizing monetary policy where necessary to prevent temporary price pressures from becoming persistent.

He also stressed the need for reforms that improve infrastructure, digital connectivity, skills, and create a more favorable business environment, which could unlock private investment and job creation.