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issue 594 | 18 May 2025

World

AI needs more abundant power supplies to keep driving economic growth

Artificial intelligence (AI) is an emerging source of productivity and economic growth that is also reshaping employment and investment. AI has the potential to raise the average pace of annual global economic growth according to scenarios in the recent analysis, included in the International Monetary Fund’s (IMF) April 2025 World Economic Outlook. AI, however, needs more and more electricity for the data centres that make it possible. The resulting strain on power grids has major implications for global electricity demand. The world’s data centres consumed as much as 500 terawatt-hours (TWh) of electricity in 2023, according to the most recent full-year estimate by the Organization of the Petroleum Exporting Countries (OPEC). That total, which was more than double the annual levels from 2015-2019, could triple to 1 500 TWh by 2030, OPEC projects. As the Chart of the Week shows, electricity used by data centres alone, already as much as that of Germany or France, would by 2030 be comparable to that of India, third world’s largest electricity user. This would also leapfrog over the projected consumption by electric vehicles, using 1.5 times as much power than electric vehicles by the decade’s end.

Source: IMF Blog

Africa

African presidents rally public-private partnerships for growth

In the face of global trade tensions and protectionist policies that threaten livelihoods and economic stability, leaders across Africa believe that reviving the relationship between governments and the continent’s private sector could chart a new path to prosperity. At the Africa CEO Forum in Abidjan, Côte d'Ivoire, presidents and business leaders emphasised the need to re-evaluate this relationship to ensure sustained economic growth. This comes amid global trade tensions and protectionist policies, notably those stemming from the “America First” agenda of United States President Donald Trump, which have created uncertainty and reduced market access for African exporters. Amir Ben Yahmed, the CEO of Jeune Afrique Media Group, the organisers of the summit, said that the convention aims to foster dialogue between governments and the private sector on how they can collaborate more effectively to spur development on the continent.

Source: The EastAfrican

Africa

ECA and Japan launch first-ever joint project to boost intra-African trade through digitalisation

The United Nations Economic Commission for Africa (ECA) and the Government of Japan represented by the Mission of Japan to the African Union (AU) have officially launched their first joint initiative to support Africa’s economic integration process through support to the implementation of the African Continental Free Trade Area (AfCFTA). The project, supported through a USD1-million grant from the Supplementary Budget for JFY 2025, was formally launched at a meeting held at ECA in Addis Ababa on 13 May 2025. This collaboration marks the first opportunity that Japan has provided direct financial support to ECA’s work championing African integration, thereby underscoring a shared commitment to digital innovation, inclusive trade, and regional value chain development on the African continent. The project, titled “Boosting Intra-African Trade through Leveraging Digitalization for Effective and Inclusive AfCFTA Implementation,” will be implemented over 12 months and aims to support AfCFTA state parties in supporting their efforts to implement the AfCFTA, enhancing accessibility of relevant trade information, strengthening digital ecosystems, and empowering women-led micro, small, and medium-sized enterprises in AU countries, in particular Namibia, Sierra Leone, Cameroon and Tanzania.

Source: ECA

Africa

First AU debt conference convenes in Lomé: ECA executive secretary outlines five imperatives for restoring Africa’s fiscal sovereignty

Over 500 delegates, including heads of state, ministers of finance, central bank governors, development partners, and civil society organisations gathered in Lomé for the inaugural African Union (AU) Debt Conference, held under the theme Africa’s Public Debt Management Agenda: Restoring and Safeguarding Debt Sustainability. The three-day conference was convened by the AU Commission in partnership with the Government of Togo, under the High Patronage of Faure Gnassingbé, President of the Council of Ministers of Togo, who opened the session by calling for a “collective African ambition that prioritises sovereignty, solidarity, and regional stability.” He urged participants to rethink global debt rules and emphasised that “debt, when used strategically and responsibly, must serve as a tool for the common good.” In his opening remarks, Mr Claver Gatete, Executive Secretary of the United Nations Economic Commission for Africa (ECA), warned that “Africa is not merely facing a debt crisis – it is confronting a development crisis.” He outlined five imperatives to restore fiscal sovereignty and turn Africa’s debt into a lever for transformation: reframe debt as a tool for development; deepen transparency and strengthen debt management; reform the global financial architecture; scale up innovative and green finance; and strengthen domestic resource mobilisation.

Source: ECA

Africa

The AfDB reinforces commitment to private sector development in Lusophone countries during a high-level mission to Portugal

A high-level delegation from the African Development Bank (AfDB) recently participated in the 13th Lusophone Compact Standing Committee Meeting in Portuguese capital Lisbon, with a focus on operationalising the Lusophone Compact Guarantee Program. The mission marked a significant step in the bank’s ongoing efforts to expand investments and partnerships through the Lusophone Compact – a tripartite partnership involving the AfDB, the Government of Portugal, Portuguese-speaking African countries (PALOPs), and Brazil, which recently joined as the eighth member. From 30 April to 2 May, mission members held strategic engagements with the Government of Portugal aimed at diversifying the range of financing instruments available to PALOP countries. “The mission was highly successful, characterised by productive engagements with private sector stakeholders whose prospective projects have the potential to drive development across the PALOP region,” commented Neima Ferreira, the AfDB’s Lusophone Compact Coordinator. During the five-day mission, AfDB representatives held a series of meetings with prominent Portuguese private sector companies, aiming to attract investments and establish a robust project pipeline across PALOPs.

Source: AfDB

East Africa

EAC lays the foundation for effective implementation of regional e-Commerce Strategy

The East African Community (EAC) has made significant progress toward regional digital transformation with the convening of the Regional e-Commerce Engagement Platform (EEP). The meeting, held from 8 to 9 May 2025 in Kampala, Uganda, focused on validating the Action Plan for Harmonisation of e-Transaction Legislations and updating the Monitoring and Evaluation Tool that tracks the implementation of the EAC e-Commerce Strategy. The EAC e-Commerce Strategy, adopted on 12 July 2022, serves as a blueprint to foster a vibrant, secure, and inclusive e-commerce environment in East Africa, aiming to integrate partner states into the global digital economy. The strategy’s core objective is to establish an EAC Single Digital Market, where businesses and consumers can seamlessly transact across borders. The harmonised legal environment, advanced through the validated e-transaction Action Plan, will reduce regulatory friction and increase trust and compliance in digital transactions. The effective implementation of the EAC e-Commerce Strategy is set to facilitate the region in achieving significant digital transformation gains.

Source: EAC

East Africa

EAC unveils regional Payment System Masterplan to drive financial integration and digital trade

The 28th Ordinary Meeting of the East African Community (EAC) Monetary Affairs Committee (MAC) approved the EAC Cross-Border Payment System Masterplan, a transformative initiative aimed at enhancing financial integration, promoting regional trade and accelerating the region’s journey toward a seamless, efficient, and secure payment ecosystem. The MAC Meeting, constituted by the governors of the EAC partner states’ central banks, reviewed progress made in the implementation of the roadmap towards realisation of a single currency by 2031. The governors further approved the Masterplan in an effort to ensure an inclusive, secure, efficient and interoperable cross-border payments environment to support the EAC Monetary Union objectives and in alignment with EAC’s wider vision for economic integration. The EAC Cross-Border Payment System Masterplan seeks to establish an integrated payments environment across the partner states by enhancing the efficiency, speed, and security of cross-border financial transactions, promoting the use of local currencies, deepening financial markets and digital inclusion and supporting the region’s overall economic development through harmonised digital financial infrastructure.

Source: EAC

Angola

IMF staff completes 2025 post-financing assessment mission to Angola

An International Monetary Fund (IMF) team lead by Ms Mika Saito visited Luanda between 6 and 12 May to conduct Angola’s 2025 post-financing assessment (PFA). Angola’s economy experienced a robust recovery in 2024 driven both by stronger oil production and a rebound in the non-oil sector. Real GDP growth reached 4.4%, surpassing earlier projections. While inflation remains elevated, inflationary pressures also eased somewhat in the first few months of 2025. The outlook has, however, deteriorated significantly compared to the 2024 Article IV consultation, reflecting a fall in oil prices and tighter external financing conditions. As a result, the preliminary growth projection for 2025 has been revised down to 2.4% from 3% in the 2024 Article IV consultation, while inflation is expected to continue its gradual decline. This downward revision to the outlook also poses risks to fiscal performance. Staff was reassured by the authorities’ strong resolve in containing emerging risks and in identifying mitigating measures critical to preserve macroeconomic stability and debt sustainability, while protecting the most vulnerable and growth momentum. The IMF team thanks the authorities for their productive engagement and hospitality. Angola’s 2025 PFA is expected to be discussed at the IMF Executive Board in July 2025.

Source: IMF

Benin

AfDB and Bank of Africa Benin sign EUR15-million guarantee facility to improve trade finance and support businesses

On Monday, 12 May in Cotonou, the African Development Bank (AfDB) and the Bank of Africa Benin (BOA-Benin) signed a EUR15-million guarantee agreement to strengthen the Bank of Africa's trade finance activities in Benin and support Beninese businesses. The signing of this agreement represents an important milestone in the AfDB Group’s commitment to Benin’s private sector, in support of the government’s efforts to fortify the country’s financial sector. “The transaction guarantee facility will support imports of production machinery and telecommunications equipment needed to underpin Benin’s industrialisation process by providing essential guarantees for the confirmation of trade finance instruments issued by BOA-Benin,” said Lamin Drammeh, Head of Trade Finance at the AfDB. The three-year facility will benefit both large local businesses and small and medium-sized enterprises, including those run by women. The targeted projects will be those that are least vulnerable to climate risks and that have a minor impact from greenhouse gas emissions. Although agribusiness and light manufacturing will be the principal sectors supported by this initiative, the operation will also facilitate imports of necessities to meet short-term local demand.

Source: AfDB

Cabo Verde

IMF reaches staff-level agreement with Cabo Verde on the sixth review under the ECF and the third review under the RSF arrangement

An International Monetary Fund (IMF) team led by Mr Martin Schindler held meetings with the Cabo Verdean authorities from 5–13 May 2025, to discuss the sixth review under the Extended Credit Facility (ECF) arrangement, the third review under the Resilience and Sustainability Facility (RSF) arrangement, and economic policies and reforms to be supported under an extension of both arrangements. Access under the existing ECF is 190% of quota (SDR45.03-million, approximately USD63.3-million) and access under the RSF is 100% of quota (SDR23.69-million, approximately USD31.69-million). The augmentation of 30% of quota (SDR7.11-million) will bring the total ECF arrangement to SDR52.14-million. At the conclusion of the mission, Mr Schindler issued the following statement, in part: “I am pleased to announce that the IMF team and the Cabo Verdean authorities reached staff-level agreements on the policies needed to complete the sixth review under the ECF-supported programme and the third review of the RSF arrangement as well as on economic policies and reforms that could be supported by an extension. Upon approval by the IMF’s Executive Board, completion of the sixth ECF review will allow disbursement of SDR4.51-million (approximately USD6.09-million), while the completion of the third RSF review will allow disbursement of up to SDR7.896-million (approximately USD10.66-million), depending on reform progress under the RSF.”

Source: IMF

Democratic Republic of the Congo

IMF reaches staff-level agreement with the DRC on the first review under the ECF

A staff team from the International Monetary Fund (IMF), led by Calixte Ahokpossi, IMF Mission Chief for the Democratic Republic of the Congo (DRC), visited Kinshasa from 30 April to 13 May, to hold discussions on the first review of the DRC’s economic and financial programme supported by the IMF under the Extended Credit Facility (ECF). At the end of the discussions, Mr Ahokpossi issued the following statement, in part: “The DRC authorities and the IMF team have reached a staff-level agreement on the first review of the DRC’s three-year economic and financial programme supported by the IMF under the ECF, subject to approval by IMF management and the Executive Board. Consideration by the IMF Executive Board is tentatively scheduled for end-June 2025. Since the last quarter of 2024, the DRC has faced an escalation of the armed conflict in its eastern part. The intensification of hostilities has claimed thousands of lives and caused severe humanitarian, social, and economic harm, particularly in the occupied provinces of North Kivu and South Kivu. Economic activity remained resilient, with robust GDP growth of 6.5% in 2024. Growth is projected to remain above 5% in 2025, driven by continued dynamism in the extractive sector.”

Source: IMF

Ethiopia

Ethiopia opens up business environment to boost FDI: Government officials

The Government of Ethiopia is accelerating efforts to open up its business environment in a bid to attract more foreign direct investment (FDI), senior government officials said. Speaking at the Invest in Ethiopia 2025 high-level business forum in Addis Ababa, Finance Minister Ahmed Shide, emphasised Ethiopia’s favourable investment climate and key advantages including vast arable land, abundant water resources, a young and educated labour force, and emerging infrastructure. He also noted that Ethiopia remains one of Africa’s top investment destinations, driven by the government’s homegrown economic reform agenda focused on macroeconomic stability and sustainable development. The liberalisation of sectors such as telecommunications, logistics, energy, and more recently banking, retail, and wholesale, has deepened investor confidence and reaffirmed commitment to an open and dynamic economy, Ahmed said. He pointed out the launch of the Ethiopian capital market as a milestone that enhances the country’s competitiveness and supports a private-sector-led economy, noting that ongoing legal, policy, and structural reforms are yielding tangible results, including stronger economic growth and an increasingly stable financial system.

Source: ENA

Ghana

Ghana to build second gas processing plant

Cassiel Ato Forson, Minister for Finance, has described the planned second Gas Processing Plant (GPP II) as a game-changing project that will transform the country’s energy landscape. He said it would create jobs and save the economy hundreds of millions of dollars. Dr Forson, speaking at the inauguration of the GPP II Implementation Committee at the Ministry of Energy and Green Transition, said Ghana’s over-reliance on expensive liquid fuels to power its plants has become unsustainable, costing the nation more than USD1-billion annually. “Without the Atuabo Gas Plant, Ghana would have been in deep trouble. Today, we face a similar opportunity to secure our future,” he said. He said the new GPP would save the country close to USD500-million every two years, enough to pay for the project within a short period while creating over 1 000 direct and indirect jobs. The Finance Minister joined the Minister for Energy and Green Transition, John Abdulai Jinapor, to inaugurate the technical committee tasked with overseeing the project’s implementation. Dr Forson charged the committee, chaired by the deputy minister for Energy, to deliver a comprehensive implementation plan within four weeks, stressing that the country could no longer afford delays in critical infrastructure delivery.

Source: Ghana Business News

Kenya

EU’s chamber of commerce to up trade relations with Kenya

The European Union (EU) has launched the European Chamber of Commerce in Kenya (EuroCham Kenya) aimed at enhancing economic ties and private sector collaboration. The launch took place recently in Nairobi during the second EU-Kenya business forum, held under the theme Digitalising Trade. It was attended by top diplomats, business leaders, and policymakers from both the EU and Kenya. EuroCham Kenya is designed as a platform to amplify the European private sector’s engagement in Kenya, facilitating joint advocacy, promoting investment, and supporting the implementation of the EU-Kenya Economic Partnership Agreement (EPA), which officially came into force on 1 July 2024. The agreement grants duty and quota-free access for Kenyan goods to the EU market and aims to boost trade and sustainable growth. Speaking at the event, EU Ambassador to Kenya Henriette Geiger emphasised the significance of EuroCham Kenya. “With the EPA now operational, it became necessary to create a structure that could advocate at the European level, beyond bilateral chambers like those of Germany or France,” she said. “This chamber will not replace national ones but will complement them by focusing on broader EU interests and implementation of the EPA.” The EU remains Kenya’s largest export destination, accounting for over 40% of its exports, and is responsible for more than 20% of Kenya’s total foreign direct investment.

Source: The Standard

Malawi

World Bank approves grant financing for landmark 358.5 MW Mpatamanga Hydropower Storage Project

The World Bank Board of Executive Directors has approved a USD350-million grant from the International Development Association to support Malawi’s Mpatamanga Hydropower Storage Project (MHSP), a large infrastructure operation aiming to transform the country’s energy landscape and its economic development trajectory. At completion, subject to the mobilisation of private financing, MHSP will significantly increase the country’s installed capacity, delivering 1 544 gigawatt-hours of clean energy annually. This additional energy will help supply electricity to over a million new households in the country and will create thousands of job opportunities. The MHSP was co-developed by the Government of Malawi and the International Finance Corporation (part of the World Bank Group) as a public-private partnership with an expected overall cost of over USD1.5-billion including financing costs during construction. In September 2022, the Malawian Government selected a consortium consisting of Electricité de France (EDF) and SN Malawi BV (owned by British International Investment, Norfund and TotalEnergies) as MHSP’s strategic sponsors using an international competitive tender process. The project’s financing is expected to consist of grants, equity contributions, loans and guarantees from various development partners and private sector stakeholders; and will represent the largest foreign direct investment in Malawi’s history.

Source: World Bank

Mauritania

IMF reaches staff-level agreement on fourth review of the EFF and ECF and the third review of the RSF

An International Monetary Fund (IMF) team, led by Felix Fischer, visited Nouakchott and Nouadhibou from 28 April to 9 May 2025 to hold discussions on the fourth review of Mauritania’s economic programme under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF), and the third review of the Resilience and Sustainability Facility (RSF) arrangement. At the end of the mission, Mr Fischer issued the following statement, in part: “The Mauritanian authorities and IMF staff have reached a staff-level agreement on policies to complete the fourth review of Mauritania’s 42-month blended EFF/ECF-supported programme and the third review of the RSF. Subject to approval by the IMF Executive Board, Mauritania will receive a disbursement of SDR6.4-million (about USD8.6-million) under the ECF and EFF arrangements and SDR14.86-million (about USD20.1-million) under the RSF arrangement, bringing the total disbursement under the EFF/ECF and the RSF to SDR111-million (about USD148.4-million). Economic activity was stronger than expected, with a growth rate of 5.2% in 2024, higher than the initial projection of 4.6%. Economic growth rate in 2025 is projected to decelerate to 4.0%, due to a contraction in the extractive sector. The medium-term outlook remains broadly positive assuming further reforms will be implemented to diversify the economy and lift non-extractive economic growth.”

Source: IMF

Nigeria

Building momentum for inclusive growth

Nigeria’s macroeconomic situation is improving as a result of sustained reforms according to the latest edition of the Nigeria Development Update (NDU) report. The report, titled Building Momentum for Inclusive Growth, shows that economic growth in the last quarter of 2024 increased to 4.6% (year-on-year), pushing growth for the full year 2024 to 3.4%, the highest since 2014 (excluding the 2021-2022 COVID-19 rebound). Recent reforms have also helped to strengthen the foreign exchange market and Nigeria’s external position. The consolidated fiscal position improved in 2024, driven by surging revenues. The fiscal deficit shrank from 5.4% of GDP in 2023 to 3.0% of GDP in 2024, a major improvement which was driven by a sharp increase in revenues of the entire federation, which rose from NGN16.8-trillion in 2023 (7.2% of GDP) to an estimated NGN31.9-trillion in 2024 (11.5% of GDP). This is according to the latest edition of the NDU report. The report further adds that inflation has remained high and sticky but is expected to fall to an annual average of 22.1% in 2025, as a sustained tight stance firmly establishes monetary policy credibility and dampens inflationary expectations.

Source: World Bank

Nigeria

Development Bank of Nigeria visits AfDB to benchmark sustainability and resilience into financing

A delegation of eight officials from the Development Bank of Nigeria (DBN) recently concluded a five-day study visit to the African Development Bank (AfDB) headquarters in Abidjan, Côte d'Ivoire. The visit, jointly hosted by the Climate Change and Green Growth Department and the Financial Sector Development Department, focused on sharing tools and best practices for integrating climate and sustainability considerations into the institution’s financial operations. Through the African Financial Alliance on Climate Change (AFAC), the AfDB offers technical assistance to African financial institutions to help them manage climate-related risks and unlock opportunities in green investments. Africa remains highly vulnerable to the impacts of climate change, with climate-induced losses projected to reach up to USD50-billion annually by 2030, equivalent to as much as 15% of the continent’s GDP. Despite this vulnerability, Africa holds immense potential for sustainable investment, leveraging its abundant natural capital, including land, minerals, and renewable energy resources. Mobilising domestic capital towards long-term sustainable investments is key to realising this potential.

Source: AfDB

Sierra Leone

AfDB celebrates success of 2020-2024 Sierra Leone strategy, board approves ambitious 2025-2030 framework

The African Development Bank (AfDB) has successfully concluded its 2020-2024 Country Strategy for Sierra Leone, delivering transformative infrastructure and economic progress despite challenges faced, including the COVID-19 pandemic. Building on these achievements, the bank has unveiled its 2025-2030 strategy, designed to accelerate sustainable growth and job creation through private sector and agro-industrial development. By the end of April 2025, the banks portfolio in Sierra Leone comprised of 12 operations amounting to USD265.85-million. The new 2025-2030 strategy focuses on two priorities: enhancing quality infrastructure to spur private sector growth and fostering inclusive growth through agro-industrial value chains. Aligned with Sierra Leone’s 2024-2030 National Development Plan, it aims to transform agriculture, improve food security, invest in infrastructure, create youth jobs, and build human capital. The strategy will leverage lessons from the previous period, emphasising fewer, high-impact projects and targeted training for project implementation teams to ensure efficiency.

Source: AfDB

Togo

AfDB Group approves EUR26.5-million to support the construction of a new solar power plant in Togo

The Board of Directors of the African Development Bank (AfDB) Group has approved a financing package totalling EUR26.5-million to support the development of a 62 megawatt-peak (MWp) greenfield solar photovoltaic power plant in Sokodé, Togo. The financing includes a loan of up to EUR18.5-million from the AfDB and a concessional loan of up to EUR8-million from the bank-managed Sustainable Energy Fund for Africa. PROPACO, the French development finance agency focused on private sector growth in emerging markets, will provide additional co-financing, positioning the EUR61-million project as a model of effective public-private collaboration. This project is critical for achieving Togo’s target of installing 200 MWp of renewable energy capacity by 2030. It will pave the way for the country’s energy transition away from costly and polluting thermal generation, enhancing energy security and reliability, and accelerating the path to universal access by 2030.

Source: AfDB

Uganda

Comprehensive climate change regulations expected to boost carbon market participation in Uganda

Uganda has introduced comprehensive regulations aimed at governing the development, approval, implementation and monitoring of climate change mechanisms across the country. Climate change mechanisms contribute to the mitigation of greenhouse gas emissions and support sustainable development and include cooperative and non-market approaches as defined in the Paris Agreement. Building upon the provisions of the National Climate Change Act (Cap. 182), the new National Climate Change (Climate Change Mechanisms) Regulations, 2025 (the Regulations) establish a framework that promises to enable a growing and thriving carbon market in Uganda. The Regulations provide for the approval of carbon projects, domestic and international transfer of certified greenhouse gas emissions and registration of persons intending to validate emissions reduction units (verifiers), among other things.

Source: ENS