AfDB cuts Africa's 2025 growth forecast on trade tariffs uncertainty

Africa's economic output is expected to grow by 3.9% this year, the African Development Bank (AfDB) said in its annual "African Economic Outlook" report on Tuesday, quickening from last year's pace of 3.3%.

However, this year's forecast — which covers economies of all its 54 member states — represents a 0.2 percentage points downgrade from the bank's initial forecast, the development lender said during its annual meeting in Ivory Coast, mainly due to the shocks caused by new trade tariffs imposed by the US.

The bank, which is Africa's biggest development lender with $318bn (R5.59bn) in capital, also cut its initial 2026 growth forecast by 0.4 percentage points to 4.0%, citing the same uncertainty from trade tariffs.

"Since January 2025 the world has experienced additional shocks, exacerbating an already complex global macroeconomic landscape," the AfDB said in the report.

"These shocks include a plethora of new tariffs imposed by the United States and retaliatory measures announced and implemented by its trading partners."

The turmoil is likely to curb global demand due to the resultant economic slowdown, curbing Africa's exports to the rest of the world, the AfDB said.

"The fluidity of the situation and evolving uncertainty means that the growth impact will depend on the decision of the 90-day pause of "Liberation Day" tariffs announced by the United States."

Although the US accounts for just 5% of Africa's annual global trade, the continent has already been impacted by a drop in prices of commodity and the downward revaluation of financial assets, the AfDB said.

The projected growth in the region for this year will be supported by a growth rate of more than 5% in 21 economies, the AfDB said, with Ethiopia, Niger, Rwanda and Senegal growing by at least 7%, the lender said in the report

Reuters