The International Monetary Fund (IMF) has told African governments to stop depending too much on public spending and instead focus on supporting the private sector. According to the IMF, this is one of the best ways for the continent to survive current and future economic shocks affecting countries globally.
The advice was given during the IMF and World Bank Spring Meetings held in Washington D.C., United States. The Director of the IMF’s African Department, Mr. Abebe Aemro Selassie, said that economic growth in Sub-Saharan Africa is expected to slow down to 3.8% in 2025 and 4.2% in 2026. He explained that this drop in growth is due to falling prices of commodities, weaker demand from international markets, and difficulties in getting cheap loans from outside the continent.
Mr. Selassie said it is now very important for African countries to support the private sector to grow. He said governments should carry out reforms that will make it easier for businesses to thrive. He also mentioned the need to strengthen regional trade across the continent, reduce borrowing costs, and create policies that can reduce heavy government debts. According to him, these steps will help African countries survive financial pressure from outside the continent.
He also pointed out that Africa has a very young population that can help the continent grow fast in the future. The IMF believes that if governments create the right environment for young people to start businesses and use technology, Africa can become a major source of labour and consumption in the world. Mr. Selassie said, “Africa’s youthful population can be a big advantage, but only if the right policies are in place to support innovation and entrepreneurship.”
Speaking about Nigeria, Mr. Selassie said the country is making some good efforts to reform its economy. He praised the Nigerian government for trying to be more transparent in how it manages oil revenue and how it borrows money. He said good data is important for making good policies. “Without good data, you can’t make good policies,” he added.
Nigeria has recently taken steps like removing fuel subsidies and unifying its exchange rates to improve its economy. But experts say more work still needs to be done to support private investors and local industries.
The IMF’s message to Africa is clear: depending only on government spending is no longer enough. Instead, countries need to support private businesses, attract investment, and make sure the economy is strong enough to withstand shocks from global events like trade wars, rising interest rates, or a drop in oil prices.
The IMF believes that by focusing on business-friendly reforms and creating more jobs for young people, Africa can build a more stable and independent economy. This would help reduce poverty and unemployment across the continent.
