(Ecofin Agency) - The IMF raised Sub-Saharan Africa’s growth forecast by 0.2 percentage points compared to the projections for October 2024. The region’s growth is expected to reach 4.2% in 2025.

Sub-Saharan Africa’s economy is expected to grow by 3.8% in 2024, from the 3.6% projected in October 2024. This update comes from the latest "World Economic Outlook January 2025" report published by the International Monetary Fund (IMF) on January 17. The growth forecast for 2025 remains unchanged at 4.2%, consistent with earlier predictions in April and October 2024.

The report examines the outlook for the region’s two largest economies, namely Nigeria and South Africa.

In Nigeria, economic growth for 2024 has been revised upward from 2.9% to 3.1%. The country experienced significant growth over the first three quarters of 2024, rising from 2.98% in Q1 to 3.46% in Q3. This progress is attributed to strong service sector performance and increased crude oil production. President Bola Tinubu welcomed the results, stating they reflect the country’s economic recovery despite challenges posed by his administration’s economic reforms.

In contrast, South Africa’s growth forecast for 2024 has been lowered from 1.1% to 0.8%. The country’s economic growth slowed to 0.3% in Q3 2024, down from 0.4% in the previous quarter. The decline was mainly driven by reduced activity in agriculture, forestry, and fishing, which were severely impacted by drought conditions. However, the IMF remains optimistic, citing reforms introduced by the national unity government since June 2024 as key to positioning South Africa on a path toward higher, more inclusive growth.

Sub-Saharan Africa continues to face significant challenges. Regional conflicts, inflationary pressures worsened by supply chain disruptions, and the devastating effects of climate change are complicating development efforts. Nevertheless, the IMF projects stronger growth in 2025, with Nigeria’s economy expected to grow by 3.2% and South Africa’s by 1.5%.

Worldwide, economic growth remains at 3.2% for 2024, but forecasts for 2025 and 2026 have been revised upward to 3.3%. The report attributes this adjustment largely to improved growth expectations in the United States, which offset downgrades in other major economies.