Economic growth in Sub-Saharan Africa is gaining momentum despite persistent global uncertainties and limited fiscal space, according to the latest World Bank report, Africa’s Pulse. The region’s economy is projected to grow by 3.5% in 2025, with further acceleration to 4.3% expected between 2026 and 2027.
The recovery is being fueled by cooling inflation, stabilizing currencies, rising private consumption, and stronger investment flows. The median inflation rate in the region dropped from 7.1% in 2023 to 4.5% in 2024, providing much-needed relief to businesses and consumers alike.
However, the growth, while positive, is not yet strong enough to meaningfully reduce poverty or fully meet the aspirations of a rapidly growing population. Real income per capita in 2025 is forecasted to remain about 2% below its most recent peak in 2015. Resource-rich countries, and those grappling with fragility, conflict, and violence, are lagging behind more diversified economies. Meanwhile, the region continues to face challenges in creating enough quality jobs for its expanding youth population.
“There is a growing gap between people’s aspirations for good jobs and functioning public services and often sub-optimal markets and institutions,” said Andrew Dabalen, Chief Economist for the World Bank’s Africa Region. “Urgent reforms, backed by more competition, transparency, and accountability, are critical to attract private investments, increase public revenues, and create economic opportunities for millions of young Africans entering the workforce each year.”
The report highlights several persistent risks, including regional conflicts, climate change impacts, and shifts in global trade dynamics, all of which could threaten the continent’s growth prospects. However, opportunities exist. The African Continental Free Trade Area (AfCFTA) presents a key avenue for countries to liberalize trade, diversify economies, and stimulate job creation.
To sustain growth and rebuild trust between governments and citizens, Africa’s Pulse recommends a series of policy measures. These include improving the efficiency of government spending to enhance access to essential services such as healthcare, education, water, and electricity. Better public services, a fairer tax system, and stronger accountability mechanisms are seen as critical steps to strengthening the relationship between governments and taxpayers.
The report also emphasizes that clear and predictable market rules can foster a more competitive business environment, enabling enterprises to grow and create jobs, ultimately driving inclusive economic development across the region.
As global aid declines and debt burdens remain high, African nations are at a crossroads — but with strategic reforms and stronger governance, they have an opportunity to chart a more prosperous and resilient future.
