The World Bank has raised its growth forecast for Sub-Saharan Africa in 2025 to 3.8 per cent, up from 3.5 per cent in April, signalling cautious optimism across a region that has spent years navigating the twin storms of inflation and debt distress. The upward revision, announced in the Bank’s Africa Pulse report released in October 2025, points to a gradual but resilient economic recovery anchored on moderating inflation, stabilising currencies, and measured policy easing across several major economies.
Globally, 2025 has seen a modest but uneven recovery from the disruptions of recent years. The deceleration in global inflation, alongside easing commodity prices and improved financial conditions, has given emerging and developing economies some breathing space. For Africa, this environment offers a vital reprieve, one that could translate into renewed consumer confidence, stronger private investment, and a long-awaited lift in per capita income growth.
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“The median inflation across Sub-Saharan Africa is now less than 4 percent,” said Andrew Dabalen, the World Bank’s Chief Economist for Africa, during the report’s briefing. “Most currencies which were cratering relative to the US dollar have now recovered and are stable. These favourable conditions are fuelling a recovery in private consumption and investment.”
According to Africa’s Pulse (Vol. 32), economic growth across the region has held firm despite global policy uncertainty, trade tensions, and high borrowing costs. Inflation, which peaked at 9.3 percent in 2022, is projected to stabilise around 3.9–4.0 percent annually between 2025 and 2026. This drop in inflation, driven largely by declining food and fuel prices, has allowed central banks in countries such as Ethiopia, Kenya, and Nigeria to ease monetary policy for the first time in years, creating fiscal space and boosting household purchasing power.
By August 2025, the World Bank’s food commodity price index had fallen by 4 percent year-on-year, while Brent crude oil prices declined by 16 percent. Exchange rates, once volatile, have largely steadied. The Nigerian naira, Ethiopian birr, and Ghanaian cedi, currencies that had suffered steep depreciation in recent years, all showed signs of relative stability by the third quarter of 2025, reflecting improved market sentiment and policy coordination.
In its latest forecast, the Bank expects regional growth to accelerate to an average of 4.4 percent over 2026–27, with 30 out of 47 economies experiencing upward revisions. Among the top performers are Ethiopia (up by 0.7 percentage points), Nigeria (up by 0.6), and Côte d’Ivoire (up by 0.5). These gains, the report notes, stem from improved terms of trade, recovering domestic demand, and greater macroeconomic stability.
Beneath the Surface of Progress
Yet, the World Bank warns that this recovery remains delicate. The fiscal scars of past crises continue to weigh heavily. The region’s primary fiscal deficit, which averaged 2.5 percent of GDP in 2020, narrowed to 0.3 percent in 2024, but overall budget deficits remain high due to mounting interest payments. In nearly four out of five African countries, governments now spend more on servicing debt than on health or education.
The number of countries in debt distress or at high risk has surged from eight in 2014 to twenty-three in 2025, representing nearly half of Sub-Saharan Africa’s economies. For policymakers, this means that while inflation relief and currency stability create room for optimism, the structural constraints of debt management and weak revenue mobilisation still cloud the horizon.
“High debt and interest burdens are crowding out essential public spending,” the report notes, cautioning that fiscal consolidation, though necessary, could slow down the pace of recovery if not balanced with growth-oriented investments.
Growth patterns across the region remain uneven. The report shows West and East Africa leading the recovery, buoyed by resilient service sectors and improved agricultural performance. Nigeria’s GDP is expected to expand by 3.9 percent this year, supported by the telecommunications and information sectors, alongside modest oil production gains. Ethiopia continues to outperform, maintaining growth above 6 percent, helped by currency stabilisation and gradual reform in its industrial sector.
Kenya’s economy grew by 4.9 percent in the first quarter of 2025, driven by agriculture and mining, while Ghana’s inflation, which soared above 23 percent in 2024, fell to 12.1 percent by mid-2025, aided by a stronger cedi and tighter fiscal discipline.
However, resource-dependent economies such as Angola, Zambia, and Mozambique have faced slower recoveries amid subdued oil and mineral prices and persistent structural bottlenecks.
The Human Equation
Despite rising optimism, the report makes clear that Africa’s recovery is not yet broad enough to reduce poverty significantly. Real income per capita in Sub-Saharan Africa is projected to rise by 1.3 percent in 2025, up from 1.0 percent in 2024, and reach 1.9 percent by 2027. Yet poverty, measured at $3.20 per day, is expected to decline only marginally — from 50 percent in 2024 to 48.4 percent in 2027, with the number of poor people in the region climbing to 671 million.
This slow improvement underscores a deeper truth: that Africa’s growth must increasingly translate into jobs and productivity, not just GDP figures. As the Africa’s Pulse theme “Pathways to Job Creation” emphasises, the region’s demographic surge, with an expected 620 million people joining the labour force by 2050, demands a structural shift toward medium and large-scale enterprises that can generate wage-paying employment at scale.
A Global Framework for Resilience
Africa’s recovery unfolds against a complex global backdrop. While the world economy continues to adjust to geopolitical frictions and trade policy uncertainty, Africa’s relatively low exposure to US tariffs and diversified export destinations offers some insulation. Nonetheless, reduced global appetite for risk, limited access to external finance, and vulnerability to commodity shocks remain persistent headwinds.
The World Bank situates Africa’s growth trajectory within a global framework that prizes resilience, debt sustainability, and climate-conscious investment. As global institutions push for greener and more inclusive growth, African governments face the task of aligning domestic reforms with international initiatives such as the Global Development Compact, Paris Climate Agreement, and IMF Resilience and Sustainability Trust, ensuring access to concessional financing and climate-linked infrastructure support.
Africa’s rising growth forecast is not merely a statistical rebound; it is a test of policy endurance. The continent’s ability to sustain this momentum will hinge on prudent fiscal management, continued inflation control, and targeted investments in energy, digital connectivity, and human capital.
For now, the World Bank’s message is clear: Africa’s economic pulse is steadying. Inflation has loosened its grip, currencies are regaining balance, and households are beginning to breathe again. But the rhythm of recovery must be nurtured through discipline, innovation, and inclusion, lest the music of progress be drowned out by the old familiar chorus of debt and disparity.
