Non-resource-intensive economies such as Kenya, Ethiopia and Côte d’Ivoire are poised to outperform their peers especially oil producers in 2025 – a recent report by BMI, a Fitch Solutions Company, has projected.
- The countries are expected to benefit from lower global oil prices and easing external pressures as they tend to import most of their energy needs.
- Countries rich in key resources for the global energy transition, such as copper and cobalt, are projected to perform well as global demand surges.
- With a lack of investment in infrastructure and falling crude prices, growth in traditional oil-producing nations including Angola and Nigeria is forecast to slow down.
“Lower oil prices will support private consumption and fixed investment for net oil importers, while producers of commodities deemed critical for the global energy transition such as copper and cobalt will benefit from increasing global demand,” the report noted.
Lower inflation across SSA is expected to pave the way for monetary policy easing, with central banks likely to cut interest rates to stimulate growth. Some economies, including Nigeria and Ethiopia, will continue to struggle with elevated inflation levels, keeping overall regional inflation above historical trends.
Efforts to reduce budget deficits will continue in 2025, with the average SSA fiscal deficit expected to narrow from 4.3% of GDP in 2024 to 3.9%. However, persistent structural issues such as high government spending, public discontent, and security challenges will limit the pace of progress.
New governments in Botswana, Mauritius and Ghana are expected to face elevated societal pressures stemming from a combination of weak growth, elevated inflation and unemployment.
“Elevated public discontent will make it harder for the government to introduce new revenue generation measures, as seen in protests across Nigeria and Kenya in mid-2024,” the report noted.
The U.S. is expected to lose ground in the region under Donald Trump due to tariff-heavy policies and the foreign aid reductions to SSA.
While China remains a dominant economic force, many African nations are looking to diversify their global partnerships, increasing engagement with India, the UAE, and Türkiye.
