
Sub-Saharan Africa’s economic growth is expected to improve to an average 4.2 per cent this year from an estimated 3.8 per cent in 2024, boosted by investments in energy and infrastructure and an expanded services sector, Moody’s Ratings has said.
In a new report, the credit rating agency lifted its outlook for the region’s credit fundamentals to stable from negative, saying fiscal consolidation efforts would help reduce debt.
That’s despite ongoing social, political and environmental risks in countries such as Ivory Coast and Mozambique.
It stated that South Africa and Nigeria, the region’s two biggest economies, are both making reforms that boost their creditworthiness and economic-growth prospects.
According to Moody’s, South Africa will take time to show major improvement even as power cuts ease, while Nigeria is expected to continue with efforts to establish a better-functioning foreign-exchange market.
Average economic growth in sub-Saharan Africa is likely to be higher than in the past decade in part due to a series of shocks, including the commodity-price plunge of 2014-16, Covid-19, and the inflation surge following Russia’s 2022 invasion of Ukraine, the rating agency said.
However, a renewed loss of access to global capital markets, rising refinancing risks and as-yetunknown inflationary pressures would threaten stability, Moody’s said, adding that a sustained appreciation of the dollar in 2025 could raise the cost of servicing foreign-currency debt.