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issue 596 | 01 Jun 2025

World

Debt is higher and rising faster in 80% of global economy

Global public debt could increase to 100% of global GDP by the end of the decade if current trends continue, according to projections in the latest Fiscal Monitor. The rising ratio of public debt-to-GDP reflects renewed economic pressures as well as the consequences of pandemic-related fiscal support, according to the report. This trend raises fresh concerns about long-term fiscal sustainability as many countries face rising budget challenges. The Chart of the Week shows that about a third of countries, accounting for 80% of global GDP, have public debt that is both higher than it was before the pandemic and rising at a faster pace. More than two-thirds of the 175 economies in the study now have heavier public debt burdens than before COVID-19 spread in 2020. Public debt’s evolution over the past five years diverges widely across countries, which means fiscal policy must vary in line with country specific factors and circumstances. However, given the uncertain times that may lie ahead amid high trade policy tensions, countries everywhere will need much greater resilience.

Source: IMF Blog

Africa

AfDB hits record USD11-billion in new investments for 2024-2025 Annual Development Effectiveness Review

The African Development Bank (AfDB) Group has announced a record-breaking USD11-billion in new operations for 2024, its highest ever. This includes USD5.5-billion dedicated to climate finance, underscoring its pivotal role in catalysing inclusive growth and resilience across Africa. The announcement came within the bank’s Annual Development Effectiveness Review (ADER) for 2025, a comprehensive results report assessing its impact in supporting development across the African continent over the past year. In a global context marked by global economic turbulence, geopolitical tension, rising conflict and growing climate pressures, Africa continues to demonstrate notable resilience. The 2025 ADER demonstrates the bank’s response to these challenges and its work with countries to accelerate inclusive growth, strengthen resilience, and drive long-term development. The report was released during the AfDB Group’s 2025 Annual Meetings, taking place in Abidjan, Côte d’Ivoire. The report presents key achievements under the strategic priorities for driving Africa’s transformation known as the High 5s: Light Up and Power Africa, Feed Africa, Industrialise Africa, Integrate Africa, and Improve the Quality of Life for the People of Africa.

Source: AfDB

Africa

African Economic Outlook 2025 – Africa’s short-term outlook resilient despite global economic and political headwinds

Africa’s economy is projected to increase from 3.3% growth in 2024 to 3.9% in 2025, reaching 4% in 2026, despite mounting geopolitical uncertainties and trade tensions, the African Development Bank (AfDB) Group said in its flagship 2025 African Economic Outlook report. Despite the prevailing domestic and external challenges Africa continues to demonstrate notable resilience. The report, titled Making Africa’s Capital Work Better for Africa’s Development, was released during the AfDB Group’s 2025 Annual Meetings, taking place in Abidjan, Côte d’Ivoire. It demonstrates the continent’s capacity to weather multiple shocks while identifying pathways to unlock a vast potential for transformation. The report presents encouraging projections despite significant challenges: 21 African countries will achieve growth exceeding 5% in 2025, with four countries – Ethiopia, Niger, Rwanda, and Senegal – potentially reaching the critical 7% threshold required for poverty reduction and inclusive growth; Africa’s projected growth rates will surpass the global average and outpace most other regions except emerging and developing Asia; and Africa’s continued resilience is built on effective domestic reforms and improved macroeconomic management.

Source: AfDB

Africa

AI on trial: Embarking on an AI POC

As organisations start embracing the Artificial Intelligence (AI) journey, beyond the use of more common AI tools such as ChatGPT and DeepSeek, they often face uncertainty, not only about whether a specific AI tool is fit for purpose, but also whether a new tool will deliver real-world value. It is fast becoming practice that organisations seeking to adopt AI tools do not take a “Big Bang” approach, which may be both risky and costly, but rather embark on a Proof of Concept (POC). An AI POC is a limited-scope project designed to test whether a specific AI tool can solve a specific business problem, allowing the organisation to take AI “for a spin” whilst also identifying the limitations and potential challenges associated with the adoption of the tool. POCs are low risk in theory, but they carry significant legal and non-legal risks in practice. AI POCs can involve personal data, automated decision making, or third-party tools.

Source: ENS

Africa

Annual Meetings 2025: African private-sector players and AfDB officials discuss business opportunities

On the fourth day of the African Development Bank (AfDB) Group’s Annual Meetings in Abidjan, a seminar on business opportunities with the AfDB Group brought together private-sector players from 40 African countries and led to constructive exchanges with bank officials. “Africa will not develop without a robust private sector. This seminar should give you a better understanding of how the bank operates and how to work with us,” Gauthier Boulard, Senior Director of Resource Mobilization and Partners at the AfDB, told participants. During the seminar, the bank provided updated information on its procurement plan and contractual policies, as well as on procedures for accessing business opportunities for companies or projects. Information was also shared on procurement rules, integrity and corruption. “With regard to our Ten-Year Strategy 2024-2033, we expect to have to finance more transformative projects, i.e. projects that bring about change in the market in which they take place… We are ready to support the private sector,” said Ronald Rateiwa, Senior Strategy, Policy and Infrastructure Officer at the AfDB.

Source: AfDB

Africa

ECA urges credit rating reform to support Africa’s access to affordable capital

The United Nations Economic Commission for Africa (ECA) has called for urgent reforms to sovereign credit rating practices that continue to undermine African countries’ access to affordable capital, despite clear signs of macroeconomic resilience and structural reform across the continent. Speaking at the opening of the inaugural Africa Annual Credit Ratings Conference in Cape Town on 21 May, Zuzana Schwidrowski, Director of ECA’s Macroeconomics, Finance and Governance Division, said outdated and inconsistent rating methodologies were contributing to disproportionately high borrowing costs for African nations. “Africa’s development should not be held hostage by narrow perceptions of risk,” she said. “Credit ratings are more than technical assessments. They shape the continent’s access to development finance, influence investor sentiment, and directly affect the cost of capital.” Currently, only two African countries hold investment grade ratings. According to Ms Schwidrowski, this reflects not just fiscal challenges but also systemic flaws in how major global credit rating agencies assess sovereign risk in Africa. She cited issues such as limited country coverage, lagging data, and structural biases that fail to consider ongoing reforms and local economic fundamentals.

Source: ECA

Southern Africa

SADC Statistics Committee concludes meeting in Victoria Falls, pushes for protocol ratification and regional data reforms

The Southern African Development Community (SADC) Statistics Committee concluded its meeting in Victoria Falls, Zimbabwe, with a renewed focus on strengthening regional statistical cooperation and harmonisation. A key outcome of the meeting was a strong call for member states to urgently sign and ratify the SADC Protocol on Statistics. The committee recommended that SADC member state seize the upcoming SADC Heads of State and Government Summit in August 2025 in Antananarivo, Madagascar, as the next statutory opportunity to sign the Protocol. Alternatively, member states may sign the Protocol in their countries at any convenient time with the facilitation of the SADC Secretariat. The committee expressed concern over the continued delays in the signing and ratification of SADC legal instruments, highlighting the significant implications for regional integration. These delays undermine the timely execution of regional policies, limit access to potential funding from international cooperating partners and multilateral financial institutions and hinder effective collaboration among member states. The committee referenced a report considered by the SADC Council in August 2024, which outlined the far-reaching consequences of the slow pace in the signing and ratification of protocols.

Source: SADC

Angola

Building starts on ‘largest’ private solar PV plant

Construction has started on what has been billed as the largest privately-owned solar photovoltaic (PV) power plant in Angola. The project, scheduled to come online next year, is set to provide an electricity supply to tens of thousands of homes. The Angolan company Quilemba Solar Lda, a joint venture between TotalEnergies (51%), Sanangol (30%) and Maurel & Prom (19%), has begun construction work on the Quilemba power plant. It is located near Lubango in southern Angola. The Quilemba solar PV power plant, with an initial capacity of 35 MWp and the possibility of adding 45 MWp in a second phase, is scheduled to come in stream during the first half of 2026, said Maurel & Prom. “The project will be the largest privately-owned [PV] power plant in Angola and will contribute to the decarbonisation of the country’s energy mix by supplying renewable electricity to nearly 40 000 home.”

Source: ESI Africa

Cabo Verde

Cabo Verde takes strategic steps to strengthen fiscal sustainability and create fiscal space

The Government of Cabo Verde is undertaking a series of reforms to strengthen fiscal sustainability and accelerate inclusive economic growth. According to the new Public Finance Review released by the World Bank, securing these reforms requires a more efficient fiscal policy that enhances domestic revenue mobilisation and improves the quality of public spending. The report, titled Enhancing Fiscal Sustainability in the Face of Shocks, analyses the performance of public finances between 2019 and 2023, within a context of successive external shocks and ongoing economic recovery. It provides concrete policy options to help the Government of Cabo Verde create additional fiscal space – estimated at between 3.65% and 4.15% of GDP – through revenue and expenditure reforms and by reducing fiscal risks, especially those stemming from state-owned enterprises.

Source: World Bank

Chad

IMF reaches staff-level agreement with Chad on a four-year ECF programme

At the request of the Chadian authorities, an International Monetary Fund (IMF) mission led by Julien Reynaud visited N’Djamena from 5-16 May to conduct discussions on IMF support for the authorities’ economic reform programme. At the end of the mission, Mr Reynaud issued the following statement, in part: “IMF staff completed policy discussions with the authorities on a potential new programme under the Extended Credit Facility (ECF) to be supported by IMF resources of about USD630-million (SDR455.65-million) over four years. Chad is at a turning point in its history. Following a political transition completed in February 2025, the Chadian authorities are keen to implement an ambitious plan of reforms and projects in their National Development Plan (NDP), Chad Connexion 2030. The NDP will focus on four key areas: (i) infrastructure development; (ii) social policy and essential public services; (iii) economic and industrial development; and (iv) improvement of the business environment. The NDP will be implemented in a challenging global environment. Conflict and instability in the region, as well as lower oil prices and reduced official development aid funding will put further strain on the country’s fiscal resources.”

Source: IMF

Comoros

IMF reaches staff-level agreement on the fourth review of the ECF with Comoros

An International Monetary Fund (IMF) team, led by Ms Suchanan Tambunlertchai, held meetings in Moroni from 29 April to 13 May to discuss progress on economic and financial policies and reforms in the context of the fourth review of the four-year Extended Credit Facility (ECF)-supported programme. The Comorian authorities and the IMF team have reached a staff-level agreement, subject to approval by the IMF’s Management and Executive Board. Completing the review will make available SDR3.56-million (about USD4.7-million) to Comoros, bringing total disbursements so far under the arrangement to about USD23.5-million. Ms Tambunlertchai issued the following statement, in part: “Economic activity softened in 2024, on the back of subdued exports, modest imports, and weak private sector credit growth. Headline inflation, driven largely by rising prices of imported food products, peaked at 8.7% (year-on-year) in September but moderated to 6% by year-end. Tax revenue underperformed, as it fell short of the programmed target by about 0.4 percentage points of GDP.”

Source: IMF

Ethiopia

Ethiopia’s central bank: Leading transformative reform

Over the past year, Ethiopia – Africa’s second most populous country – has embarked on a comprehensive transformation of its monetary and exchange rate regimes. After decades of tight control, the country has liberalised the foreign exchange regime, adopted a more flexible exchange rate, moved to an interest rate-based monetary policy, and ended central bank financing of government. In parallel, the National Bank of Ethiopia is updating its legal framework and internal organisation. These reforms aim to address acute foreign exchange shortages and inflation, creating conditions for high, sustainable growth. The authorities are also tackling budgetary constraints, financial vulnerabilities in state-owned enterprises and state-owned banks, and a sovereign debt restructuring while mitigating social impacts and managing humanitarian pressures. The International Monetary Fund (IMF) is supporting Ethiopia’s reform efforts through a four-year USD3.4-billion Extended Credit Facility arrangement.

Source: IMF

Ghana

Ghana’s economic reset hinges on stronger public-private partnership – President

President John Dramani Mahama recently underscored the need for deeper collaboration between the public and private sectors to drive Ghana’s economic recovery and long-term transformation. Addressing the Ninth Ghana CEO Summit in Accra, President Mahama said Ghana’s path to sustainable growth required a renewed compact between government and business, based on mutual accountability, shared risk, and shared prosperity. “The time has come for us to lift the gloom, to restore confidence, and to build again. Ghana is open for business again,” he said. President Mahama said: “This summit marks the beginning of a new compact between the public and private sectors.” He announced plans to institutionalise a national business consultative platform for regular engagements between government and industry leaders. That, he said, would allow businesses to provide feedback on key policy reforms and co-create solutions for national development. The summit, held on the theme: Leading Ghana’s Economic Reset: Transforming Business and Governance for a Sustainable, Futuristic Economy, brought together key actors from the public and private sectors, including CEOs, investors, policymakers, and development experts.

Source: Ghana Business News

Ghana

Why floating nuclear energy plants could be a workable fit

Ghana is exploring floating nuclear energy technology as a feasible and cost-effective solution to bridge its energy deficit and accelerate its clean energy transition. A senior energy official involved in Ghana’s nuclear planning cited strong political consensus, institutional readiness and positive public sentiment as key enablers. Speaking at the recently concluded Enlit Africa 2025 in Cape Town, South Africa, Dr Robert Sogbadji, Deputy Director, Nuclear and Alternative Energy, Ministry of Energy and Green Transition, said the country was now looking beyond traditional nuclear models. Ghana is considering floating nuclear power plants as a viable alternative – particularly in the context of limited land and growing energy demand. “Floating nuclear plants offer a flexible and scalable model for countries like Ghana. They reduce the need for complex site characterisation and civil works and they align with infrastructure we already have in place, such as the Karpowership – a floating gas power plant integrated into our national grid.”

Source: ESI Africa

Kenya

Beneficial ownership disclosure requirements: What Kenyan companies need to know

Section 894 of the Companies Act, Chapter 486 of the Laws of Kenya, requires companies to provide information on beneficial ownership as detailed in our previous article. The Registrar of Companies issued a compliance notice on 17 October 2024 based on the Companies (Beneficial Ownership Information) Regulations of 2020, and section 93A of the Companies Act, which requires companies to comply with the disclosure of Beneficial Ownership within 30 days, that is by 30 November 2024. On 11 April 2025, the Registrar of Companies issued a subsequent notice, which confirmed the deadline set for 30 November 2024 had lapsed. The notice therefore called on companies to go through a published list of non-compliant companies to determine if theirs is listed, and to take further action to comply with the Registrar’s directives within 30 days of publishing the notice; by 11 May 2025. Following the recent alert issued to companies to comply with the disclosure of a record of beneficial ownership, this ENSight sets out steps that are crucial for company owners to take.

Source: ENS

Kenya

Despite improvements, Kenya’s fiscal path is fragile amid high debt vulnerabilities and weak revenue growth

Kenya’s public debt remains at high risk of distress, with interest payments absorbing about a third of tax revenue. Reforms to strengthen fiscal sustainability in an equitable way while promoting inclusive growth and jobs are critical to revive a slowing economy and a weak labour market. According to the latest World Bank Kenya Economic Update: Special Focus on Poverty and Distributional Impacts of Fiscal Policy in Kenya, some macroeconomic indicators have improved since 2024 – including declining inflation, a stabilised exchange rate, and stronger international reserves – but the overall pace of economic growth has slowed. Kenya’s real GDP is expected to pick up gradually in the medium term, with growth projected to increase from 4.5% in 2025 to about 5.0% in 2026–2027. The economic slowdown stemmed from multiple challenges including floods, high interest rates, and subdued business sentiment following protests and reduced development spending. Despite resilient agriculture, strong remittance inflows, and a rebound in services, growth was further dampened by weak industrial activity, sluggish private consumption, and policy uncertainty that constrained investment and formal employment growth.

Source: World Bank

Kenya

KenGen to cut reliance on hydropower to boost energy resilience

Kenya Electricity Generating Company PLC (KenGen), a state-owned utility, said that it plans to reduce the country’s reliance on hydropower, which is vulnerable to unpredictable rainfall patterns, to boost energy resilience. Kenya’s hydropower installed capacity is estimated to be 840 MW, accounting for 24% of total electricity output, said Peter Njenga, CEO of KenGen. “The hydropower is the cheapest and most established source of power, but it is also the most vulnerable to climate change,” Njenga said in a statement issued in Nairobi, the capital of Kenya. “With droughts recently cutting deep into production, the country’s reliance on water-fed dams is being re-evaluated,” he said. Geothermal energy accounts for the largest portion of Kenya’s installed capacity at 26.13% and thermal power at 17.36%, with the rest contributed by solar, wind, and other sources, according to data from the Energy and Petroleum Regulatory Authority. Njenga said KenGen has rolled out real-time monitoring systems across its hydropower dams to ensure efficient water use and early warning for potential risks.

Source: Capital Business

Kenya

Kenya can cut public debt-to-GDP ratio by a third while generating jobs if it prioritises fiscal, governance, and structural reforms

Kenya’s fiscal policy could be better used to create more and better jobs, strengthen the social contract with Kenyan citizens, provide better public services, and spur inclusive economic growth. Strengthening governance is paramount to reduce fiscal leakage which undermines public trust, while structural reforms are needed to promote productivity and growth in an environment of fiscal consolidation. The latest Kenya Public Finance Review - Beyond the Budget: Fiscal Policy for Growth and Jobs recommends a set of policy reforms that are estimated to bring Kenya’s debt-to-GDP level to about 44% of GDP by 2035, close to the mid-2010 figure. The report notes that Kenya’s fiscal performance is strongly associated with its changing economic structure during the last 15 years, in addition to governance and socio-political challenges. A fiscal consolidation strategy should reflect this context, looking at the budget and beyond. The report comes at a time when Kenya faces a precarious fiscal situation. High public debt, ballooning interest payments, and economic slowdown necessitate urgent fiscal consolidation. However, austerity measures alone are insufficient and lack social support.

Source: World Bank

Liberia

New Country Partnership Framework for Liberia focuses on building foundations for more and better jobs

The World Bank Group announced a new Country Partnership Framework (CPF) for Liberia that supports more and better jobs by focusing selectively on four essential outcome areas: education; energy access; accountable and transparent governance; and private investment – with focus on agroindustry and forestry. The new Liberia CPF covers the fiscal years 2025 to 2030 and supports the country’s national vision, Liberia Rising 2030, a bold roadmap for peace, stability, and inclusive growth. The CPF will also support the ambitious new National Development Plan, which aims to lift Liberia to lower-middle income status within five years. “We recognise Liberia’s achievements in maintaining peace and stability since 2003. A critical focus of our engagement with Liberia is to help the country experience the dividends of peace through more and better jobs and improved quality of life for all Liberians. The CPF is closely aligned with the ARREST Agenda for Inclusive Development and aims to accelerate development impact in the crucial years remaining to deliver on Liberia’s Vision 2030,” said Robert Taliercio, World Bank Division Director for Ghana, Liberia and Sierra Leone.

Source: World Bank

Rwanda

Rwanda signs new air travel agreements with 12 countries

Rwanda has taken another step toward expanding its global aviation reach with the ratification of 12 new Bilateral Air Services Agreements (BASAs), deepening its air connectivity and opening new opportunities for trade, tourism, and investment. The decision was made during a Cabinet meeting held recently and chaired by President Paul Kagame at Urugwiro Village. The ratified agreements – already signed between the Government of Rwanda and those of Eswatini, Guinea, Liberia, Malawi, Mali, Zimbabwe, Georgia, France, Poland, Oman, Suriname, and Canada – provide a legal framework for the operation of air transport services between Rwanda and each of the respective countries. These agreements facilitate the movement of people, goods, exports, and imports and are intended to strengthen business relationships and promote tourism. While these ratifications do not result in immediate flight launches, they empower airlines such as RwandAir to negotiate route rights and initiate new services once all regulatory and commercial conditions are met. The move aligns with Rwanda’s strategy to become a continental and global air transport hub, supported by major infrastructure projects like Bugesera International Airport and long-term investment in the national carrier, RwandAir. 

Source: KT Press

São Tomé and Príncipe

IMF reaches staff-level agreement with São Tomé and Príncipe on the first review under the ECF arrangement and completes 2025 Article IV mission

An International Monetary Fund (IMF) staff team, led by Mr Slavi Slavov, Mission Chief for São Tomé and Príncipe, held meetings in São Tomé from 8-21 May 2025 to discuss progress on the authorities’ reforms and policy priorities in the context of the first review of São Tomé and Príncipe’s 40-month programme supported by the Extended Credit Facility (ECF). The arrangement was approved by the IMF Executive Board for a total amount of SDR18.5-million (around USD25-million) on 19 December 2024. The team also conducted discussions on the 2025 Article IV consultation. At the conclusion of the visit, Mr Slavov issued the following statement, in part: “The São Toméan authorities and IMF staff team have reached a staff-level agreement on the first review of São Tomé and Príncipe’s economic programme supported by the ECF arrangement. Subject to approval by the IMF’s Executive Board, São Tomé and Príncipe would have access to about SDR4-million (USD5.3-million), bringing the total IMF financial support disbursed under the current arrangement to around SDR8-million (about USD10.6-million).”

Source: IMF