AfDB Cuts Africa’s 2025 Growth Forecast Amid Global Trade Tensions

Although the AFDB revised Africa’s growth forecast to 3.9%, it is still an acceleration compared to the 2024 growth figure of 3.3%.

The AfDB released Africa’s 2025 growth forecast during its 2025 Annual Meetings held in Abidjan, Côte d’Ivoire, on May 27.

Tariff Uncertainties Impacting Africa’s 2025 Growth Forecast

The AfDB attributes its revision of Africa’s 2025 growth forecast to a series of new tariffs imposed by the United States.

On April 2, the US imposed a plethora of new tariffs on its trading partners. Eventually, on April 9, President Trump paused its implementation for 90 days amid global financial market volatility that followed its announcement. However, the pause has done little to dampen the potential impacts on Africa’s economies.

The AfDB, in its report, noted that the US accounts for just 5% of Africa’s annual global trade. However, Africa has already been impacted by falling commodity prices and the downward revaluation of financial assets.

According to the bank, tariff uncertainties will likely weaken global demand for commodities. As a result, this could lead to disrupted supply chains and heightened investor uncertainty globally. Both consequences would hurt Africa’s trade-dependent economies.

Many African countries, particularly those heavily reliant on the export of raw materials and agricultural goods, are also experiencing price volatility and reduced demand.

In its latest Monthly Oil Market Report (MOMR), published on April 14, OPEC revised downward its 2025 oil consumption growth projection from 1.45 million barrels per day to 1.3 million barrels per day, citing the impact of US tariffs.

The International Energy Agency (IEA) revised its 2025 global oil demand growth forecast by 300,000 barrels per day. Thus, the total global oil demand growth for 2025 is 730,000 barrels per day (bpd).

Furthermore, the devaluation of African currencies is compounding the problem. Thus, importers of fuel and goods in Africa are facing rising import bills, which is deepening their fiscal deficits.

The turmoil is likely to curb global demand, resulting in an economic slowdown in Africa as its exports to the rest of the world reduce.