AFRICA is on track for a modest economic recovery in 2025, with growth projected at 3.7 percent, up from 3.4 percent in 2024, according to the United Nations’ World Economic Situation and Prospects (WESP) 2025 report. This improvement is expected to continue into 2026, with a forecasted 4.0 percent growth. Key drivers include recoveries in major economies such as Nigeria, Egypt, and South Africa, alongside ongoing regional integration efforts under the African Continental Free Trade Area (AfCFTA).
However, the continent still faces significant hurdles, including high inflation, mounting debt, and climate-related risks, which threaten to derail its progress.
Global economic outlook remains subdued
The global economy is forecast to grow by 2.8 percent in 2025, maintaining the same rate as 2024 but falling short of the pre-pandemic average of 3.2 percent. According to the report by the UN Department of Economic and Social Affairs (DESA), sluggish investment and weak productivity continue to hamper recovery efforts worldwide.
UN Secretary-General António Guterres emphasised that these challenges are slowing economic progress and hindering efforts to improve global living standards.
Regional disparities in Africa
East Africa is expected to maintain robust economic growth in 2025, but other regions face distinct challenges. Central Africa grapples with stagnant oil production and political instability, while youth unemployment and high debt burdens remain pressing issues across the continent.
Inflation is a critical concern, with several African countries experiencing double-digit rates. The report notes that food inflation is particularly persistent, with nearly half of developing economies experiencing rates above 5 percent in 2024. This trend exacerbates food insecurity and threatens vulnerable populations.
Mounting debt and fiscal pressures
Debt servicing is a significant constraint for African governments, with interest payments consuming an average of 27 percent of government revenues in 2024—up sharply from 19 percent in 2019. This leaves limited fiscal space for crucial investments in healthcare, education, and infrastructure.
The report underscores the urgent need to address structural challenges to sustain growth. Enhanced regional collaboration, inclusive governance, and targeted investments are critical for long-term economic resilience.
Opportunities in critical minerals
Africa’s vast reserves of critical minerals, such as cobalt and lithium, present significant opportunities for economic growth. However, governance challenges, environmental risks, and unequal benefit distribution could hinder progress. The report advocates for sustainable practices, including robust taxation systems and stabilisation funds, to maximise public revenues from these resources.
‘Critical minerals have immense potential to accelerate sustainable development, but only if managed responsibly,’ said Li Junhua, Under-Secretary-General of DESA.
Call for global cooperation
The WESP 2025 report calls for bold international action to support Africa’s development. Proposed reforms include restructuring the global financial system and boosting investments in renewable energy and sustainable infrastructure to build resilience.
The pursuit of net-zero emissions by 2050 remains a key global objective, but the report warns of economic and social challenges. Guterres urged global leaders to deliver on their commitments, particularly at the Fourth International Conference on Financing for Development in 2025.
‘Shocks in one part of the world impact us all. Every country must contribute to building a sustainable, resilient future,’ Guterres concluded.
Africa economic growth 2025 is a promising yet challenging journey, requiring bold regional strategies and international cooperation to ensure sustainable development.
There Is No Such Thing As “Diezani Loot” By Prof Mike Ozekhome, SAN, CON, OFR, LL.D
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