The United Nations (UN) is optimistic about Africa’s economic growth in 2025, with a projected regional GDP expansion of 3.7%. This growth is expected to be driven by economic recovery in key countries such as Nigeria, South Africa, and Egypt.
A recent report by the UN also forecasts a positive outlook for 2026, with a regional GDP growth projection of 4.0%. In Nigeria, economic pressures are expected to ease as the country transitions through major policy reforms in energy subsidies and foreign exchange management. The economy is nearing the end of this challenging phase, with consumer prices and exchange rates beginning to stabilize.
Between 2023 and 2024, Nigeria’s central bank implemented several policy changes to strengthen the value of the naira and attract foreign capital inflows. Despite these efforts, the country’s inflation rate rose to 34.8% in December 2024, while the naira depreciated to ₦1,535 per dollar.
In South Africa, electricity supply constraints stabilized in 2024, leading to a projected economic recovery to pre-pandemic levels. Egypt’s path to economic recovery will be supported by increased revenue generation, with improvements in the balance of payments and investments from the IMF and the Abu Dhabi Development Holding Company.
East Africa is expected to see faster growth than other regions on the continent, driven by sustained domestic demand and a recovery in international tourism. Countries like Ethiopia, Kenya, Rwanda, Uganda, and Tanzania are anticipated to experience moderately high GDP growth. However, Central African countries like Chad, Equatorial Guinea, Gabon, and the Central African Republic face less promising growth prospects due to stagnating crude oil production and weak economic recovery.
The UN has also expressed concerns about the growing debt-servicing burden in some of Africa’s largest economies, which could impact capital expenditure. In response, the organization recommends a carefully calibrated approach to fiscal consolidation, including efficient public spending, improved subsidy programs, and progressive tax policies.
In conclusion, Africa’s economic outlook for 2025 and beyond is positive, with key countries expected to drive regional growth. However, challenges such as debt servicing and economic disparities among different regions remain areas of concern that will require strategic interventions to ensure sustainable growth and development.
