Sub-Saharan Africa's economic growth will depend on the United States

According to a recent study by Crédito y Caución, the Sub-Saharan African economy could grow by 3.8% in 2025, one point above the global average, thanks to investment in natural resources and infrastructure and the dynamism of private consumption, which will drive imports. 

However, the region is exposed to several uncertainties arising from the United States that could slow its economic momentum. 

Although the forecasts are not the same for the five main sub-Saharan economies - Angola, Ghana, Kenya, Nigeria and South Africa - all of them are exposed to changes in their preferential access to the US market, the impact of international aid and new tariffs.  

The US African Growth and Opportunity Act (AGOA), which offers duty-free access to the US market for certain sub-Saharan countries, will expire in September 2025, and it is currently unclear what the new administration will decide about its future. 

According to the insurer's analysis, the United States is expected to continue to give preferential treatment to countries that are most strategic in geopolitical and geoeconomic terms. South Africa is therefore at greater risk of losing its current AGOA status, which would be particularly damaging to its automotive industry and could lead to the loss of 200,000 jobs. 

On the other hand, Angola and Kenya have better prospects of remaining in the agreement due to the opportunities they offer for access to rare metals and minerals. Kenya is also important to the United States because of its military cooperation in serving its security interests in neighbouring countries. Ghana and Nigeria, for their part, are important suppliers of oil and gas. 

In terms of tariffs, there are regions with a high trade surplus with the United States, such as South Africa, which has been penalised with a 31% tariff. This is particularly damaging to the automotive industry, which will also suffer the consequences of a new US tariff of 25% on all cars and parts imported from other countries. 

On the other hand, the US administration is also considering excluding imports such as oil, gas, copper, pharmaceuticals and semiconductors from the new tariffs, which could benefit the main sub-Saharan economies. 

Another uncertainty facing the region in 2025 and 2026 is aid for cooperation, one of the main sources of external financing. As proof of this, Nigeria financed more than a fifth of its national health budget with US aid. However, countries such as France, Germany, the United Kingdom and, now, the United States have announced cuts in such aid. 

Finally, the cost of international financial flows is another major challenge for the region's economies. Several countries, such as Angola, Kenya and Nigeria, issued international sovereign bonds again in 2024, in a scenario where no rate cuts are expected and where the interest on these bonds is linked to the long-term US public debt interest rate. Higher debt costs will also weigh on economic growth in sub-Saharan Africa.