Zambia, two others set for strong 2025 growth – AfDB

BUUMBA CHIMBULU

THE African Development Bank (AfDB) says Zambia, eSwatini, and Zimbabwe could see economic growth of six percent or more in 2025, backing a weak regional trend.

In its African Economic Outlook 2025, the bank noted that while Africa’s overall growth prospects faced significant downside risks, a few countries were expected to maintain strong economic momentum.

For Southern Africa, growth was estimated at 1.9 percent in 2024, rising modestly to 2.2 percent in 2025 and 2.5 percent in 2026.

Compared with the 2025 Macroeconomic Environment Outlook (MEO), these figures reflected downgrades of 0.9 and 0.6 percentage points, respectively.

“Despite the low regional growth outlook, a few countries – notably eSwatini, Zambia, and Zimbabwe – could achieve growth rates of six percent or higher in 2025,” the report stated.

Meanwhile, growth in South Africa, the United States’ largest trading partner in Africa, is projected at a modest 0.8 percent in 2025, with a slight recovery to 1.2 percent in 2026.

The bank observed that the country’s ongoing efforts to address global trade disruptions and implement structural reforms could improve its medium-term growth trajectory.

The AfDB also cautioned that African countries could overturn the subdued growth outlook by mitigating the transmission of global shocks and economic uncertainty into domestic markets.

However, this would hinge on several factors, including curbing inflation, addressing the continent’s mounting debt, and the resilience of the global economy in the face of rising risks and fragile demand.

“Downside risks to the outlook include restricted trade, which could hamper growth directly by reducing business activity and indirectly through financial channels, weakening investor confidence and triggering capital outflows,” it warned.

Persistent inflation remained a critical concern, fuelled by entrenched domestic supply constraints and a diminished effectiveness of monetary policy in containing demand-driven price pressures.

This, the bank noted, could dampen the expected growth rebound.

Although external financial inflows to Africa rebounded in 2023, the Bank highlighted risks to future inflows due to aid cuts by key donors and heightened global uncertainty.

Total external financial flows – comprising foreign direct investment (FDI), portfolio investments, official development assistance (ODA), and remittances – grew by 7.3 percent to US$204.6 billion in 2023, reversing a 13.2 percent decline recorded in 2022.

Notably, portfolio flows shifted from net outflows of US$23.1 billion in 2022 to net inflows of US$322.9 million in 2023 – an improvement of over 100 percent.