Economy
Afreximbank Predicts 4% Real GDP Growth for Africa Amid Economic Challenges
By Adedapo Adesanya
The Africa Export-Import Bank (Afreximbank) has projected a 4 per cent real Gross Domestic Product (GDP) growth for Africa in 2025 amid global economic fragility.
This forecast was contained in the 2025 African Trade and Economic Outlook (ATEO) Report carried out by the Cairo-based lender, which noted that Africa’s real GDP could reach 4.1 per cent in 2026 and 4.2 per cent in 2027.
The 2025 African Trade and Economic Outlook (ATEO) provides an in-depth analysis of Africa’s economic and trade performance, projecting the continent’s growth trajectory in the short-to- medium term.
It highlights the key macroeconomic and trade developments shaping Africa’s recovery, detailing opportunities for sustainable growth amid heightening global and domestic uncertainties.
The 2025 ATEO report said 41 per cent of African economies were projected to grow by at least five per cent, nearly double the global rate of 21 per cent, reflecting the continent’s expanding role as a driver of global growth.
According to the report, Africa’s gradual recovery would be supported by increased global demand for African exports, the disinflation trend, and the implementation of structural reforms to diversify African economies
The report said the were downside risks to the African economic outlook, including rising geopolitical tensions and fluctuating commodity prices.
“Economic slowdown in the United States and China may also impact the international financial conditions and the demand for African resources.
“Internal conflicts and climate change threaten stability and growth.”
However, the report said potential upside risks include the anticipated decline in global interest rates, which would begin in 2025 if geopolitical uncertainty remained unchanged, potentially enhancing access to financing.
“Additionally, the African Continental Free Trade Area (AfCFTA) presents an opportunity to boost economic integration and intra-African trade, reducing vulnerability to external shocks in the medium term.”
To address potential downside risks, the report suggests several short-term strategies which include adopting a nuanced and proactive monetary policy stance, and enhancing resilience against climate-related and geopolitical disruptions.
Other strategies include boosting domestic consumption alongside the service sector and accelerating the implementation of the AfCFTA agreement.
In the medium term, the report said strategies should shift toward economic diversification through strategic investments in human capital development and workforce training within key emerging sectors.
“Additionally, efforts should be made to improve economic governance, public infrastructure, and initiatives to strengthen intra-African trade dynamics.”
The report highlighted several challenges and solutions for Africa to attain stability and sustainable development amid a rapidly uncertain global landscape.
The first challenge identified was Africa’s reliance on commodity exports which had made countries vulnerable to fluctuations in world commodity prices.
“To reduce their exposure to these price fluctuations, it is crucial to accelerate the structural shift to a more diversified and resilient economy.”
The second challenge identified was debt sustainability, with the report stating that several African countries allocate over 50 per cent of their revenues to debt servicing, due to their large development financing needs.
“Ensuring debt sustainability requires more efficient public spending and prioritisation of growth-oriented investment projects.”
The report said the third challenge involved human capital and skill development.
To tackle this challenge, the report suggests that governments should invest more resources to improve healthcare and promote collaboration between the public and private sectors.
“ Strengthening training in sciences and technology facilitates skill development and talent allocation, which is essential for successful structural transformation.”
It said the fourth challenge was the weak social outcomes of economic growth in Africa caused by slow progress in poverty reduction.
“To boost poverty-reducing potential growth, improving the provision of basic public infrastructure and services is vital, reducing dependency on natural resources through structural transformation.
“Addressing inequalities must be an integral part of sustainable development goals, ensuring equitable access to quality education, healthcare, energy, transport infrastructure, and financial services.”
The final challenge identified in the report was the growing concerns about environmental degradation and the increasing frequency of extreme weather events.
“For sustainable economic development, promotion of green growth must align with comprehensive policy frameworks that address climate change adaptation and mitigation strategies, while recognizing continental development needs and challenges.”
The 2025 ATEO provides an in-depth analysis of Africa’s economic and trade performance, projecting the continent’s growth trajectory in the short-to-medium term.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
By Aduragbemi Omiyale
The federal government has been advised to consider exploring other funding sources to finance its budget deficits.
Speaking with Punch recently, the chief executive of CSA Advisory, Mr Aliyu Ilias, said the current appetite for borrowing by the government cannot be sustained because it elevates debt-servicing costs.
The economist suggested the sale of some public assets and the involvement of the private sector in infrastructure financing for economic growth.
According to him, running to the debt markets to raise funds for the government is not the best route to take, as the reliance on borrowing always leads to higher debt-servicing obligations.
“The more you borrow, the more you are also incurring more debt services,” he said, tasking the government to also capitalise on increased oil revenues stemming from ongoing geopolitical tensions in the Middle East.
“The government can actually sell off some of their assets to raise more money. The government can also, if you look at the revenue we are getting from oil, it’s getting more, especially with this war. It’s another opportunity for us to actually not borrow again,” Mr Ilias submitted.
He also pointed to ongoing tax reforms as another avenue to improve government finances and narrow the fiscal gap.
“The government can also look at tax reform. The fact is that the government does not have money. The only chance for getting more money is to address the financial deficit,” he added.
By Adedapo Adesanya
Crude oil was up by $1 on Monday as Iran and Israel said they had halted attacks on each other following an appeal from US President Donald Trump.
Brent crude futures gained $1.16 or 1.3 per cent to trade at $94.25 a barrel, while the US West Texas Intermediate (WTI) crude futures were up 76 cents or 0.8 per cent to $91.30 per barrel.
Iran’s military said Monday it halted attacks on Israel after the two countries exchanged their most intense strikes in months, further straining an already shaky ceasefire as well as the US-Israeli relationship. Iran, however, said it would resume strikes if Israel continued to hit Hezbollah in Lebanon.
Israel also halted attacks on Iran, Israeli Prime Minister Benjamin Netanyahu said, stopping short of acknowledging a ceasefire that US President Donald Trump said the countries were aiming for.
President Trump said earlier that the US blockade, which was introduced in April, would remain in place “in full force” until a final peace agreement between the two warring nations is reached.
Prices gained more than 5 per cent earlier on Monday after renewed Israeli strikes on Iran and attacks on Lebanon had reduced hopes of an imminent end to the wider war.
Market analysts noted that because of the strikes, investors were concerned that flows through the Strait of Hormuz might remain restricted for longer. Roughly a fifth of the world’s daily supply of oil and liquefied natural gas passed through the waterway before US-Israeli airstrikes at the end of February unleashed the latest escalation of the Middle Eastern conflict.
Yemen’s Iran-aligned Houthis said on Monday they would ban ships linked to Israel from the Red Sea after Israel renewed its military attacks on Iran, adding to concerns about global shipping and energy flows.
In the face of the supply crisis, a sub-group under the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday agreed on its fourth oil output target increase in four months. The seven members decided to increase targets by 188,000 barrels per day from July, the same as the June hike, which was adjusted down from monthly increases of 206,000 barrels per day in May and April to take into account the exit of the United Arab Emirates (UAE).
On paper, the sub-group has increased its output quotas from April to June by almost 600,000 barrels per day, but in reality, the group’s production has collapsed due to export cuts by Gulf members, averaging 33.19 million barrels per day in April compared with 42.77 million barrels per day in February.
Saudi Arabia has cut its official selling prices for crude oil to Asia in July for a second month.
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