Let’s use African resources to fund growth

She underscored the potential of the AfCFTA to diversify Africa’s economy and reduce reliance on unprocessed commodity exports. 

In her address to ECA delegates, Schwidrowski highlighted the fact that intra-African exports are more diversified compared with exports to non-African countries.

Although Africa’s economy has remained resilient in the face of multiple shocks – including the pandemic, higher global inflation, and debt distress among others – Schwidrowski warned that the continent needs to grow much faster. This requires effective implementation of the AfCFTA. 

Africa’s GDP is expected to expand by 3.8% in 2025 and 4.1% in 2026, a rate of growth she believes is insufficient to advance sustainable development.

Schwidrowski said the major risks currently facing African economies included disruptions to global trade policy, declining aid, and increased economic and political fragmentation at the global level. 

While inflation in African countries has decreased, prices remain elevated compared to several years ago.

She expressed concerns over Africa’s low tax-to-GDP ratio and called on policymakers to intensify efforts to bolster domestic resource mobilization, particularly as many nations were grappling with significantly high debt service costs. Africa’s total repayments had increased threefold from 2010 to 2023.  

“Africa’s is slightly below 15% of GDP, so it’s limited. But the good news is that countries are making progress to close the loopholes, broaden the tax base, eliminate incentives and, with the help of advanced economies, significantly reduce illicit financial flows,” she said.

She noted that efforts to expand alternative sources of revenue generation were especially needed in light of declining official development aid and a sharp reduction in bilateral loans from key partners like China, whose official lending to the continent fell from $28.8bn in 2018 to $4.6bn in 2023.