Africa is set to experience modest economic growth in 2025, driven primarily by its major economies—Nigeria, Egypt, and South Africa—according to the United Nations’ World Economic Situation and Prospects 2025 report. The continent’s economic growth is projected to rise from 3.4% in 2024 to 3.7% in 2025, with an anticipated increase to 4% by 2026. This positive trajectory is underpinned by recoveries in key economies and the African Continental Free Trade Area (AfCFTA), which continues to foster regional integration.
Globally, the economic outlook remains muted, with the world economy expected to grow by just 2.8% in 2025, unchanged from the 2024 rate and significantly below the pre-pandemic average of 3.2%. The report, compiled by the UN Department of Economic and Social Affairs (DESA), highlights resilience in the face of compounded shocks over recent years. However, persistent structural issues such as weak investment and sluggish productivity continue to constrain global recovery.
In his foreword, UN Secretary-General AntónioGuterres acknowledged these global challenges, stating that they slow economic progress and hinder efforts to improve living standards worldwide. Africa’s growth outlook, while relatively stronger, underscores the need to address systemic vulnerabilities that could impede its recovery.
East Africa stands out with robust growth, while other regions face specific hurdles. Central Africa, for instance, struggles with stagnating oil production and political instability. Across the continent, high debt burdens and widespread youth unemployment remain critical concerns. The report emphasizes that addressing these challenges will require focused investments, inclusive governance, and enhanced regional collaboration.
One of the most pressing issues for African economies is inflation, particularly food inflation. Many African countries experienced double-digit inflation rates in 2024, with food inflation surpassing 5% in nearly half of developing economies. This trend has intensified food insecurity among vulnerable populations, amplifying socio-economic disparities.
Debt servicing also presents a formidable challenge, with African governments allocating an average of 27% of their revenues to interest payments in 2024, a sharp rise from 19% in 2019. This fiscal strain limits their ability to invest in critical sectors such as health, education, and infrastructure. The report underscores that without addressing these structural weaknesses, Africa’s growth momentum could falter, hindering long-term development goals.
Despite these challenges, Africa’s abundant reserves of critical minerals such as cobalt and lithium offer significant opportunities for economic growth. The report notes that these resources could be instrumental in driving sustainable development, particularly in the context of the global transition to renewable energy. However, realizing this potential requires robust governance frameworks to prevent environmental degradation and ensure equitable benefit distribution.
Countries with significant critical mineral reserves are encouraged to implement policies that capture public revenues through taxation and stabilization funds. These measures would allow nations to manage resource booms effectively and invest in sustainable development initiatives. Li Junhua, Under-Secretary-General of DESA, emphasized the transformative potential of critical minerals, noting that their benefits could only be fully realized through responsible management.
The report also calls for bold international cooperation to support Africa’s development. It highlights the need for reforms in the global financial architecture to provide greater fiscal flexibility and support for developing economies. Investments in renewable energy and sustainable infrastructure are identified as key priorities for building resilience and fostering inclusive growth.
As countries work toward achieving net-zero emissions by 2050, the report stresses that clean energy deployment must be paired with universal energy access. However, this transition will entail economic, social, and environmental challenges that demand collective action. Guterres warned of the interconnected nature of global economies, where shocks in one region can have ripple effects worldwide.
The World Economic Situation and Prospects 2025 report serves as a call to action, urging nations to fulfill their commitments, particularly at the upcoming Fourth International Conference on Financing for Development. Addressing Africa’s challenges and leveraging its opportunities will require not only regional efforts but also concerted international collaboration to achieve sustainable economic growth and improved living standards across the continent.
