African economies are facing mounting economic threats as rising debt burdens, currency depreciations, declining foreign aid, and increasing global trade risks strain fiscal stability, the Executive Secretary of the Economic Commission for Africa (ECA), Claver Gatete, has warned.
Gatete, who spoke during a briefing with African ambassadors at the United Nations headquarters in New York, painted a grim picture of the continent’s macroeconomic outlook. The meeting, convened at the Permanent Mission of the African Union, comes amid heightened concerns over debt distress, fiscal deficits, and the impact of global protectionist trade policies on Africa’s export markets.
According to Gatete, Africa’s public debt situation has worsened significantly, with over 50% of countries now carrying debts exceeding 60% of their GDP. At least seven nations are already in debt distress, while another 11 remain at high risk. The average fiscal deficit across the continent was pegged at 5.1% of GDP in 2024, reflecting growing budgetary pressures.
Currency instability is further compounding the crisis. Nigeria’s naira has lost nearly 95% of its value between 2023 and 2024, while Egypt’s currency has depreciated by about 50% within the same period. “External financing is drying up, but government spending demands keep rising,” Gatete cautioned, urging African governments to pursue aggressive domestic resource mobilisation.
Adding to the economic woes is a significant decline in official development assistance (ODA). Gatete revealed that ODA dropped to 2.1% of gross national income (GNI) in 2023, down from 3.4% in 2006. Major donor nations such as the United States, the United Kingdom, and Germany are expected to further scale back aid allocations, posing risks for development financing.
The ECA chief also raised concerns over the impact of protectionist trade policies in developed countries. Preliminary research conducted by ECA in collaboration with the African Union Commission and the African Development Bank (AfDB) shows that new US import tariffs could slash African exports to the US by 21.5%, threatening industrial jobs and regional supply chains.
“This goes beyond trade volumes; it undermines Africa’s voice in shaping global trade rules,” Gatete warned.
Despite the challenges, the ECA is working to strengthen economic resilience through technical and policy support. Gatete highlighted several ongoing initiatives, including:
Domestic taxation reforms: Ethiopia recently benefited from ECA’s support in reforming its property tax system.
Transfer pricing audits: ECA assisted Mauritania in monitoring multinationals to curb tax evasion.
Customs training under AfCFTA protocols to boost intra-African trade.
Gatete also reaffirmed ECA’s commitment to operationalising national strategies under the African Continental Free Trade Area (AfCFTA), which he described as a critical tool for industrial growth and economic diversification.
Gatete urged African nations to speak with a united voice on economic reforms and trade negotiations. “Africa’s voice must be coherent, coordinated, and backed by evidence,” he stressed, calling for stronger collaboration between African permanent missions in New York, Addis Ababa, and regional institutions.
He further emphasised that Africa must embrace blended financing, improved governance of international financial institutions, and Special Drawing Rights (SDRs) reforms to improve access to affordable credit.
While Africa’s GDP growth is projected at 2.9% to 3.6% in 2024, Gatete warned that without urgent reforms, the fragile recovery could be derailed by continued capital flight, trade mispricing by multinationals, and poor debt management.
He concluded by urging African governments to balance the need for foreign direct investment (FDI) with policies that prevent “toxic investments” that drain more wealth than they bring in.