US tariffs and retaliatory measures prompt caution in AfDB African economic outlook.
AfDB – Trade Disruptions Prompt Economic Reassessment
The African Development Bank (AfDB) has adjusted its 2025 economic growth forecast for the continent to 3.9%, a slight decrease from earlier projections. The findings were released in the annual African Economic Outlook report. This revision is attributed to global trade uncertainties, particularly the imposition of new US tariffs and subsequent retaliatory measures by other nations. While this marks an improvement from the 3.3% growth recorded in 2024, it reflects a 0.2 percentage point downgrade from previous estimates. The 2026 forecast has also been reduced by 0.4 percentage points to 4.0%.
Ripple Effects of Tariff Policies
Despite the United States accounting for only 5% of Africa’s global trade, the continent is experiencing indirect effects from the recent trade policies. The AfDB notes that the new tariffs have led to a decline in commodity prices and a downward revaluation of financial assets, impacting African economies. The situation remains fluid, with the potential for further changes depending on the outcome of the US’s 90-day pause on additional tariffs.
Growth Amidst Uncertainty
Despite these challenges, the AfDB report highlights that 21 out of 54 African economies are projected to grow by more than 5% in 2025. Notably, Ethiopia, Niger, Rwanda, and Senegal are expected to achieve growth rates exceeding 7%. This resilience underscores the diverse economic dynamics across the continent.
Strategic Considerations for Stakeholders
The current economic landscape presents both challenges and opportunities for investors and policymakers. The AfDB’s revised forecasts emphasize the need for strategic planning and adaptability in response to global trade developments. Stakeholders are encouraged to monitor the evolving situation closely and consider the implications for trade and investment in the region.
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