Africa’s Economic Growth Strengthens Despite Global Challenges, Reports African Development Bank
Africa’s economy is showing signs of resilience and growth amid global uncertainties, according to the 2025 Macroeconomic Performance and Outlook (MEO) report released by the African Development Bank (AfDB).
The report projects the continent’s real GDP growth to reach 4.1% in 2025 and 4.4% in 2026, driven by economic reforms, declining inflation, and improved fiscal and debt positions.
Unveiled at the 38th Ordinary Session of the African Union Assembly in Addis Ababa, the report highlights that 24 African nations, including Rwanda, Senegal, and South Sudan, are expected to surpass 5% GDP growth in 2025. Additionally, 12 of the world’s 20 fastest-growing economies will be African, reinforcing the continent’s position as the second-fastest-growing region globally, after Asia.
Despite the positive outlook, Africa’s growth remains below the 7% threshold required for substantial poverty reduction. Persistent challenges such as geopolitical tensions, structural weaknesses, climate-related disasters, and prolonged conflicts in regions like the Sahel and the Horn of Africa continue to pose risks.
The report estimates Africa’s real GDP growth at 3.2% in 2024, slightly above the 3.0% recorded in 2023. Inflationary pressures are expected to ease, with the continent’s average inflation rate projected to decline from 18.6% in 2024 to 12.6% in 2025-2026. Fiscal deficits, which widened to 4.6% of GDP in 2024, are anticipated to narrow to 4.1% by 2026.
Prof. Kevin Urama, AfDB’s Chief Economist and Vice President for Economic Governance & Knowledge Management, emphasized the need for stronger coordination between monetary and fiscal policies to sustain economic expansion.
He also urged African nations to bolster foreign reserves and implement pre-emptive debt restructuring to prevent financial instability.
Nnenna Nwabufo, AfDB Vice President for Regional Development, Integration, and Business Delivery, stressed the importance of forward-looking policies to reinforce Africa’s resilience.
“Africa’s economic resilience and growth prospects remain strong, but challenges persist,” she noted, calling for decisive and well-coordinated policies.
Panel discussions during the report’s launch focused on accelerating initiatives such as the African Continental Free Trade Area (AfCFTA), the proposed Africa Credit Rating Agency, and the African Financial Stability Mechanism. AU Trade Commissioner Albert Muchanga urged the private sector to invest in logistics and manufacturing to fully harness the benefits of AfCFTA.
