BMI, the research arm of Fitch Solutions, has forecasted a wave of monetary easing by the Nigerian Central Bank and other central banks across Sub-Saharan Africa (SSA) in 2025, citing expectations of declining inflation and enhanced monetary policy convergence in the region.
In a report titled “Sub-Saharan Africa Macro Key Themes for 2025: Stronger Headline Growth But Structural Vulnerabilities Persist,” the firm predicts that regional inflation will decline from an estimated 16.4 per cent in 2024 to 14.2 per cent in 2025.
The easing of price pressures will be driven by falling energy costs, as Brent crude prices are projected to average $76.0 per barrel in 2025, down from $80.0 per barrel in 2024.
Additionally, improved currency stability is expected to bolster economies such as South Africa, Kenya, and the Democratic Republic of Congo (DRC).
BMI highlights that monetary easing in developed markets will further enable SSA central banks to adopt accommodative policies. The Federal Reserve is anticipated to cut its funds rate to 3.50 per cent, narrowing the real interest rate differential and reducing the risk of capital outflows from emerging markets.
However, challenges in key SSA economies may keep inflation above the region’s 2014-2023 average of 11.4 per cent.
In Nigeria, persistent price pressures linked to the naira devaluation and the removal of fuel subsidies are expected to maintain inflation at over 27 per cent by the end of 2024, with some relief projected in 2025.
Similarly, Ethiopia’s recent currency devaluation will drive inflation to 23.3 per cent, as the cost of imports surges in the energy-dependent nation.
Despite lingering inflationary pressures, BMI forecasts that SSA’s real GDP growth will accelerate to 3.8 per cent in 2025, up from 3.5 per cent in 2024.
Non-resource-intensive economies, such as Ethiopia, Côte d’Ivoire, and Kenya, are projected to lead the growth with a 4.7 per cent expansion, supported by declining energy costs, economic liberalization, and post-conflict reconstruction efforts.
These factors are expected to bolster household incomes, corporate profitability, and sectors such as services, construction, and banking.
Meanwhile, non-oil resource-intensive economies will also benefit from the global energy transition. The DRC, the world’s largest cobalt producer, is expected to grow by 5.7 per cent in 2025, while Zambia, a major copper exporter, is projected to achieve 5.4 per cent growth as mining activities ramp up.
South Africa, a producer of critical minerals, will see growth improve modestly from 1.0 per cent in 2024 to 1.5 per cent in 2025, driven largely by private consumption and pension reforms.
Traditional oil-exporting nations in SSA are forecast to face continued challenges in 2025 due to low global oil prices and underinvestment in production infrastructure.
Angola’s growth is expected to slow from 2.2 per cent in 2024 to 1.1 per cent in 2025, while Nigeria’s growth will remain subdued at 3.5 per cent, below its 2010-2019 average of 3.8 per cent.
BMI’s report highlights the mixed outlook for SSA economies in 2025. While declining inflation and monetary easing offer opportunities for growth, structural vulnerabilities and external pressures continue to pose risks, particularly for oil-dependent markets.
The report concludes that broad-based but cautious monetary easing will shape the region’s economic trajectory in the coming year.