Africa’s economic progress may look promising, but the reality tells a different story. The International Monetary Fund’s (IMF) Economic Report on Sub-Saharan Africa predicts a decline in economic growth from 4.0 percent in 2024 to 3.8 percent in 2025. This decline is attributed to several factors, including global shocks and higher borrowing costs from lenders. However, the real issue is deeper: Africa’s economic system is still largely shaped by unfair historical and global structures that hinder the continent’s progress. This stagnation hinders development, exacerbates inequality, restricts people’s economic freedom and access to quality education, healthcare, and political participation. To address these challenges, African governments must prioritize economic reforms by establishing sustainable debt management frameworks and expanding intra-African trade.
IMF solutions, such as fiscal tightening, debt consolidation, private sector–led reforms, and effective governance systems, can strengthen macroeconomic stability. However, their application in Africa may require adaptation for them to be fully effective. The continent’s overdependence on commodity exports, exposure to unfair trade relations, and limited local value chains call for strategies that go beyond conventional prescriptions to foster homegrown development. Decades after independence, reports indicate that several African economies continue to rely on exporting raw materials while importing finished goods. This reliance locks them in a cycle of dependency. The result is slow development, persistent unemployment, fragile fiscal systems, and debt crises.
According to the ONE African Debt Database, about 20 low-income African countries are either in or near debt distress as of 2023. While Africa has debt management frameworks, such as the G20 Common Framework, some African countries and critics have often criticized them for being slow, creditor-driven, and largely ineffective. Without well-established Pan-African debt frameworks, along with regional credit rating agencies and collective creditor talks, Africa risks staying trapped in a cycle that benefits external lenders over its own people. These three initiatives are critical as they provide a united front that not only benefits but also protects the continent’s interests.
To break this cycle, Africa must adopt a development path rooted in structural justice, which entails embedding fairness into policies and power relations that are built into systematic structures. And this development path must begin with debt reform. Rather than adhering to Western-focused definitions of debt sustainability that mostly prioritize investor confidence over local priorities, African countries should prioritize a Pan-African debt negotiation framework, backed by the African Union (AU), the African Development Bank (AfDB), and regional organizations. This framework should include collective negotiation with creditors and African credit rating agencies to counter biased global ratings. With the AU approving the launch of the African Credit Rating Agency (AfCRA) to address biases by global rating firms, the AU and AfDB can jointly work together to expedite the establishment and operationalization of AfCRA, ensuring transparent and African-tailored rating criteria.
In addition, African countries must accelerate intra-African trade by fully implementing the African Continental Free Trade Area (AfCFTA). Full implementation means not only removing tariffs but also investing in cross-border infrastructure, harmonizing customs procedures, and enabling local currency trade settlements through the Pan-African Payment and Settlement System. Reports indicate that the AfCFTA could lift 50 million people out of extreme poverty, while boosting investment by up to 159 percent and creating opportunities, especially if supported by investments in logistics and infrastructure. The continent can unlock this potential if governments support local manufacturing and regional supply chains to process raw materials into finished products before export. Such actions will create jobs, increase tax revenues, and keep more value within African economies.
Unless unfair monopolies, anti-market practices, and extractive investments are resolved, recovery from the effects of colonialism and global shocks, such as COVID-19, will continue to benefit only a few. With 70 percent of Africa’s population under 30, the continent’s youth must be placed at the center of recovery strategies.
Africa’s recovery should not be measured entirely by Gross Domestic Product growth or IMF benchmarks, but by its ability to liberate economies from structural dependency, empower local businesses, foster regional solidarity, and offer every African, especially the youth, a fair shot at prosperity. Only a homegrown, inclusive approach that combines debt justice, trade integration, youth empowerment, and industrial self-reliance can deliver the lasting transformation the continent needs.
Ruth Chileshe is a writing fellow at African Liberty.
Article first appeared on The Star Kenya.
Image by Albert Stoynov via Unsplash.
