Sub-Saharan Africa set for 3.8% growth in 2025 as inflation eases, investment returns

Sub-Saharan Africa’s economy is expected to grow by 3.8% in 2025, a modest but meaningful rebound driven by easing inflation, stabilizing currencies, and improving investment conditions, according to the World Bank’s latest Africa Pulse report released Tuesday (7 Oct).
The forecast marks an upgrade from April’s 3.5% projection and reflects renewed optimism in key economies like Nigeria, Ethiopia, and Côte d’Ivoire. The region’s median inflation rate has dropped below 4%, its lowest in years, allowing central banks to loosen monetary policy and spur private consumption and investment. “Most of the currencies which were cratering relative to the U.S. dollar have now recovered and are stable,” said Andrew Dabalen, the World Bank’s Chief Economist for Africa. A softer dollar, down nearly 10% this year, has improved financial conditions for African economies long battered by external shocks.
Real incomes are rising, and growth is expected to further accelerate to an average of 4.4% in 2026–2027. However, the Bank cautioned that structural challenges remain, particularly in job creation. With three-quarters of employment in the informal sector, the region needs to generate more secure, wage-paying jobs — especially for its fast-growing youth population. Dabalen warned that failure to address unemployment could fuel further unrest, as seen in recent protests in Kenya, Nigeria, and Madagascar. He urged governments to support SMEs and build a more inclusive growth model that can sustain long-term prosperity.