Sub-Saharan Africa’s Economic Outlook 2025: Navigating Uncertainty and Aligning Policy for Sustainable Recovery
The IMF’s April 2025 Regional Economic Outlook for Sub-Saharan Africa presents a clear warning: regional growth is slowing, debt pressures are mounting, and donor assistance is declining. Yet the report outlines critical opportunities particularly in domestic revenue mobilization, structural reform, and private sector activation that can shape a more resilient and equitable future. This policy brief gives insights into IMF’s key findings and highlights how UNDP can adapt its strategy to better support African countries, like Rwanda, in building inclusive, climate-smart, and sound economic governance. While Sub-Saharan Africa faces a sobering economic landscape in 2025 with downward-revised growth, rising debt vulnerabilities, and dwindling external support, Rwanda presents a nuanced case of resilience coupled with emerging pressure points. The latest IMF staff-level agreement following the Fifth Review of Rwanda’s Policy Coordination Instrument (PCI) provides important insights into the country’s performance within this regional context, where Rwanda posted a remarkable GDP growth rate of 8.9% in 2024, more than doubling the regional average. This strong performance was driven by robust expansion in services, construction, and agriculture, particularly food crop production. Inflation remained contained within the National Bank of Rwanda’s target range, supported by prudent monetary policy and favorable domestic food prices. Nevertheless, Rwanda is not immune to the broader challenges affecting the region. External shocks, including global financial tightening and rising import bills, have begun to weigh on Rwanda’s external accounts. The Rwandan franc depreciated by 9.4% against the U.S. dollar in 2024, helping external competitiveness but increasing the cost of debt servicing. The current account deficit widened due to elevated import demand, and public debt is projected to rise significantly, reaching 86.3% of GDP by 20263.
