Monetary Easing Shifting Economic Dynamics In Nigeria, Other Africa Countries – Analysts
Analysts at BMI, a Fitch Solutions company, project that declining inflation rates will prompt central banks across Sub-Saharan Africa (SSA) to initiate or continue their monetary easing cycles in 2025.
The analysts in their Sub-Saharan Africa Monthly Outlook report, tagged ‘Sub-Saharan Africa Macro Key Themes For 2025,’ said the shift is expected to drive greater monetary policy convergence across the region.
They noted, however, that persistent inflationary pressures in key markets like Nigeria and Ethiopia will keep regional inflation above the 2014-2023 average of 11.4 per cent.
According to BMI, non-resource-intensive economies are set to outperform traditional oil-producing nations in 2025.
The report highlights that lower oil prices will support private consumption and fixed investment for net oil-importing countries. Meanwhile, nations producing commodities critical for the global energy transition—such as copper and cobalt—are poised to benefit from increasing global demand.
Fiscal consolidation efforts will remain a focal point for SSA economies in 2025, though progress will be hindered by longstanding structural challenges.
The region’s average budget deficit is expected to decline from an estimated 4.3 per cent of GDP in 2024 to 3.9 per cent in 2025. Despite this improvement, it will still exceed the 2010-2019 average of 3.2 per cent, reflecting continued fiscal pressures.
On the geopolitical front, the analyst said SSA is expected to experience a shift in foreign influence, with traditional global superpowers losing their grip on the region.
They noted that the potential re-election of Donald Trump in the United States could further diminish U.S. engagement in Africa due to his “America First” policies.
While China is expected to maintain a strong presence, they said there are growing indications that African nations may seek to diversify their economic partnerships to reduce reliance on a single dominant power.
As SSA navigates these economic and geopolitical shifts, the coming year is likely to bring both challenges and opportunities for policymakers and investors in the region.
Monetary Easing Shifting Economic Dynamics In Nigeria, Other Africa Countries – Analysts is first published on The Whistler Newspaper
