The region’s revised growth forecast comes as part of a broader global slowdown, with the IMF cutting its world growth projection to 2.8%. The decline is largely attributed to rising trade barriers and increased policy unpredictability, factors that are weighing heavily on investor confidence and international commerce.

“No part of the world will be spared from the knock-on effects of escalating tariffs, particularly those driven by recent policy shifts in the United States,” the Fund noted in its latest assessment. It added that sub-Saharan African economies, many of which rely on global trade and investment, will feel the pressure as global demand cools and capital flows become more selective.

Africa, while often resilient in the face of external shocks, is entering uncertain territory. The IMF’s warning comes amid what it describes as a "reset" of the global economic system, one that has shaped international markets for the better part of the last eight decades.

“This is more than just a cyclical downturn,” the report states. “We are witnessing a structural transformation in how the world economy operates, and developing regions must adapt quickly to remain competitive.”

The implications for African policymakers are significant. As growth slows, governments may need to rethink their fiscal priorities, double down on domestic resource mobilisation, and look inward for sustainable paths to development.

--ChannelAfrica--