IMF Warns of Mounting Debt and Slow Growth in Sub-Saharan Africa, Urges Stronger Tax Reforms

ACCRA — The International Monetary Fund (IMF) has cautioned that Sub-Saharan Africa’s economic resilience is being tested by rising debt, global trade tensions, and tighter financial conditions, even as several nations record modest signs of recovery.

Speaking at the Regional Economic Outlook for Sub-Saharan Africa Press Briefing in Washington DC, Director of the African Department at the International Monetary Fund, Abebe Aemro Selassie said that while the region’s 2024 growth outperformed expectations, global uncertainties and policy shifts now threaten to slow the pace of progress.

“The external environment remains challenging. Global growth is slowing, commodity prices are diverging, and external buffers need to be rebuilt,” Abebe Aemro Selassie noted during the briefing.

Despite some positive developments such as Kenya and Angola’s renewed access to international capital markets the IMF emphasized that rising debt service costs are crowding out development spending across the continent.

Inflation, though easing in certain countries, remains in double digits across many others, placing households and governments under strain.

“The shift towards domestic financing has deepened the sovereign-bank nexus,” the Fund warned, adding that building fiscal discipline is critical to restoring macroeconomic confidence.

The IMF has called for modernized tax systems through digitalization, better enforcement, and fairer compliance strategies.
Officials urged governments to go beyond technical reforms and prioritize trust-building with citizens.

“It’s not just about adjusting systems,” the report stated. “It’s about building public trust, strengthening institutions, and ensuring reforms are equitable.”

These recommendations align with global efforts to strengthen domestic resource mobilization as countries seek alternatives to shrinking external financing options.

The IMF also expressed concern over the erosion of global trade stability, citing new tariffs on African exports to the United States and the expiration of preferential access under the African Growth and Opportunity Act (AGOA).

Although few Sub-Saharan economies have direct exposure to the U.S. market, trade policy uncertainty has dampened investor confidence, complicating recovery for export-reliant nations.

Since 2020, the IMF has disbursed nearly $69 billion in support to Sub-Saharan African countries including $4 billion in 2025 alone  to help governments manage fiscal crises and recover from pandemic shocks.
The Fund reaffirmed its commitment to assist with technical training, institutional capacity-building, and fiscal reforms.

“The region has shown remarkable resilience,” Abebe Aemro Selassie concluded, “but the coming months will test its ability to balance growth, equity, and sustainability.”

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