African policymakers urged to balance inflation control with social protection

Policymakers across African economies have been urged to strike a careful balance between controlling inflation and protecting vulnerable populations as global uncertainties and domestic pressures weigh on growth prospects.

This formed part of discussions at the African Consultative Group meeting, where Seedy Keita, chairman of the African Caucus and Minister of Finance and Economic Affairs of The Gambia, alongside Kristalina Georgieva, managing director of the International Monetary Fund (IMF), led deliberations on the evolving global environment and its implications for the region, at the ongoing IMF/World Bank Spring Meetings in Washington D.C.

According to the joint statement issued at the end of the meeting, near-term policy priorities should focus on keeping inflation expectations anchored while providing targeted and time-bound support to the most vulnerable segments of society.

The policymakers noted that although African economies benefited from hard-won stabilisation gains following a strong performance in 2025, growth momentum is expected to slow in 2026 amid rising global risks, including the impact of the war in the Middle East.

Real GDP growth across the continent is projected to ease from 4.5 percent in 2025 to 4.2 percent in 2026, reflecting pressures from high debt service burdens, limited access to affordable financing, and increasing development needs, particularly among low-income and fragile countries.

They warned that the ongoing global conflict could further complicate the outlook, with risks of resurging inflation, food shortages, and heightened social tensions if disruptions to production and transport persist.

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In response, the group emphasised the need for credible yet flexible fiscal policies. Oil-exporting countries were advised to save temporary windfalls and rebuild fiscal buffers, while oil-importing countries were urged to safeguard priority social and development spending even as they mobilise domestic revenues and improve spending efficiency.

The statement also stressed the importance of strengthening public financial management systems to enhance resilience and support effective policy implementation.

Beyond immediate measures, policymakers highlighted the need to accelerate structural reforms aimed at boosting growth and diversification, deepening regional integration, and developing domestic financial markets.

They further underscored the importance of investing in power and digital infrastructure to support long-term productivity and enable African economies to harness emerging technologies such as artificial intelligence in a safe and productive manner.

The meeting also noted that rising macroeconomic vulnerabilities and mounting debt pressures make ongoing efforts to strengthen debt sustainability frameworks more critical, particularly in improving transparency and helping countries better assess risks and calibrate policy responses.

The International Monetary Fund reaffirmed its commitment to supporting African countries through policy advice, financing, and capacity development as the region navigates an increasingly complex and uncertain global environment.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.