UN, AfDB reports carefully optimistic about Africa’s 2025 economic outlook, despite headwinds

This year, Africa is poised for modest economic growth, with recovery driven by the continent’s major economies, says a new UN report, with the AfDB projecting an annual growth rate of 4.3%, up from 3.7% last year.

Nigeria, Egypt, and South Africa are expected to spur economic growth on the continent in 2025, according to the United Nations’ World Economic Situation and Prospects (WESP) 2025 report.

Meanwhile, a recent report by the African Development Bank (AfDB) projects Africa to be the second-fastest-growing region globally, driven by targeted investments, inclusive governance, and enhanced regional collaboration that will support the continent’s long-term development goals. However, despite these gains, both reports warn that high inflation, mounting debt, climate-related vulnerabilities and other significant challenges will serve as headwinds to the African governments’ efforts to accelerate economic growth and reduce poverty.

The AfDB’s ‘African Economic Outlook 2024’ report projects the continent’s annual economic growth rate of 4.3%, up from 3.7% last year, with East Africa once again expected to be the most buoyant region. “Despite strong economic performance and remarkable resilience, structural transformation in Africa has been slow and uneven, and addressing this will require calling bold reforms of the global financial architecture to meet Africa’s development financing needs,” the AfDB report adds.

Looking ahead, Alex Vines, director of the Africa Programme at London-based Chatham House, highlights reducing poverty and fostering job-creating economic growth as the critical priorities that African government will need to tackle. According to Vines, about 464 million people in the region living in extreme poverty, “scarce economic opportunities, the effects of climate change and weak governance, compounded by rising living costs, are (all) fueling widespread social frustration.”