ABUJA, May 21 – The International Monetary Fund has urged Nigeria and other Sub-Saharan African economies to shift away from debt-driven and state-led growth models, warning that rising borrowing costs and weaker development financing are limiting the region’s economic prospects.
In its latest Regional Economic Outlook for Sub-Saharan Africa titled “Africa Needs a Growth Reset,” the Washington-based lender said current growth levels across the region remain too weak to significantly improve living standards.
The report said per capita income in Sub-Saharan Africa could take nearly 50 years to double if current growth trends persist, underscoring the need for broad structural reforms aimed at boosting private investment, productivity and job creation.
According to the IMF, governments across the region can no longer rely on public spending and commodity booms as the primary engines of growth, particularly as debt burdens rise and access to affordable financing becomes more constrained.
The report said reforms in governance, market openness and business regulation could lift output by around 20% within a decade if properly implemented. It also identified state-owned enterprises in the energy and transport sectors as major reform priorities, warning that below-cost tariffs continue to weaken cash flow, delay investment and increase the cost of doing business.
The lender said harmonising trade rules under the African Continental Free Trade Area could help expand market access and improve regional competitiveness. It furthered recommended targeted cash transfers, digital welfare systems and stronger institutional capacity to cushion vulnerable households during reform implementation.
The IMF said countries with stronger institutions could move faster with wider reform packages, while fragile economies may need to prioritise governance reforms and fiscal stability first.
