AFDB RELEASES 2026 ECONOMIC OUTLOOK REPORT

Añadido: 2026-05-31

[00:00:11]the 2026 annual meetings of the EFTP group took off on Tuesday with the release of these key African economic outlook report. Now the latest report highlighted that the continent's economic growth will soften to 4.2% this year from 4.4% 4% in 2025 due to impact from geopolitics and trade pressures.

[00:00:31]Now let's get more on the report from Kevin Uramama is the chief economist at African for the continent and again our institutional investors has significant assets under management up to 4 trillion. You have seen that figure before but only 2.7% of that is currently being utilized and Africa's high netw worth individuals control over 2.5 uh trillion US dollars as well. So we can do much by just bringing together basically implement NAFAT the new African financing architecture for development and we will be able to mobilize the capital we need to do our development and finally regulatory quality and is very very important for attracting the private sector and here we see that countries with strong and predictable regulatory frameworks tend to have higher uh credit to the private se credit to the private sector. And that is very key in one of the findings that we have. And then finally is what I've already said that economic governance improving economic governance delivers a a a virtual cycle in Africa's DRM arena because economic governance improves the social contact with citizens. It helps to create resources for bankable producing bankable projects. Basically is a circular flow of positives. If we focus on economic governance in chapter three, we then look at what do we need to do with existing African infra um uh financing architecture in order to be able to mobilize that domestic revenue. And here we're seeing that every indicator we looked at whether it is financial development index or gross savings, no bank deposits and domestic private sector investments, Africa is performing way below its pairs and also way below it his its potential and sovereign wealth funds uh president city talked about it as well. But our uh uh national development banks and also the insurance sector and other innovative climate uh finance options, climate finance, Islamic finance and so on are critical and has huge potentials on the continent for us to be able to mobilize that. But to do that, we basically need to accelerate the implementation of NAFAD, the new African financing architecture for development through the principles of coordination, subsidiarity, complimentarity, and disciplined risk transformation. There's quite a lot in the report that can explain all this, but because of time, I'm trying to rush through all the slides. So, what recommendations do we have? Again for time I'm not going to pick on all of them but deepening domestic capital mobilization remains central. This is the foundation for development everywhere and Africa will not be different. We need to also deepen and integrate in integrate our domestic and regional financing systems in order to create that interoperability and cooperation so that we can achieve cap mobilize capital at scale drisk at scale manage risk at scale and so on and so forth. So we need to strengthen the social contract between citizens and uh governments by improving public service delivery, fighting corruption, addressing leakages and several other issues that you'll find in the report.

[00:04:05]Again, in the medium term, we need to expand Africa's um structural reforms continue to uh because in many African countries, a number of structural reforms are already delivering dividends. So despite the shocks that we see, countries need to continue to stay the course of those reforms. We need to mainstream and accelerate the reform of the African financial architecture, NAFAT, but also implementing the African financing stability mechanism which will help address the uh the the debt financing challenges on the continent and the African monetary institute which will help in monetary stability to getting towards monetary stability on the continent. So we need to find a system to leverage Africa's um diaspora better for investments not for remittances for commission uh consumption smooning and the high note worth individuals and philanthropies as well. What can development partners do?

[00:05:03]Crisis response programs that have been delivered by development partners African development bank aim the world bank and the rest has been central to Africa's resilience during shocks. So we need to always try to help to come with a lot of things trade finance emergency budget support there are several instruments that we can use and you'll find in the report but we need to coordinate our technical assistance better as we are trying to coordinate the African financing systems the development partners need also to work better together in providing assistance uh to them especially deepening the uh support for domestic revenue mobilization with a lot of our development partners are already doing and MDBs and regional de development banks need to consider better how we manage risk basically the risking mechanisms partial credit guarantees at scale in order that to attract private sector capital into development on the continent and reforming the national development banks. The potentials of these banks are huge, but they need to be properly capitalized and coordinated and with other development finance institutions on the continent in order to be able to drive that transformation we're looking for. And again, this is part of NAFAD. And we need innovative instruments to build long-term economic resilience. And in doing so, there are several, you know, innovative financing instruments that were are identified in the report that have provide lowhanging fruits for the continent.