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Sub-Saharan Africa’s economy is projected to grow by 3.8% in 2025, signaling a modest yet meaningful recovery after a period of economic strain, according to the World Bank’s latest Africa’s Pulse report released on Tuesday, October 7. The updated forecast represents an improvement over the 3.5% growth estimate made in April, highlighting a more optimistic outlook for the region’s near-term economic trajectory.
The recovery is being driven by several positive developments: a significant reduction in inflation rates, greater currency stability, and an improved environment for both domestic and foreign investment. According to the World Bank, the region’s median inflation has declined to below 4% — the lowest it has been in several years. This drop in inflation is allowing central banks across the continent to adopt looser monetary policies, which in turn is stimulating household spending and encouraging business investments.
Andrew Dabalen, the World Bank’s Chief Economist for Africa, noted that many of the region’s currencies, which had previously experienced sharp depreciations against the U.S. dollar, have now stabilized. This trend has been supported by a weakening dollar, which has lost nearly 10% of its value this year. The softer dollar is easing financial pressure on African economies, many of which have been hit hard in recent years by external shocks such as global inflation, commodity volatility, and geopolitical disruptions.
Key economies like Nigeria, Ethiopia, and Côte d’Ivoire are leading the regional rebound, reflecting stronger investor confidence and improved macroeconomic management. Rising real incomes are also contributing to the positive outlook, with growth projected to accelerate further to an average of 4.4% during the 2026–2027 period.
However, the World Bank warns that despite these encouraging signs, the region still faces deep-rooted structural challenges — most notably in the area of employment. A staggering 75% of the region’s workforce remains in informal or precarious jobs, underscoring the urgent need for more stable, wage-based employment opportunities, especially for the rapidly growing youth population.
Dabalen cautioned that failure to address the employment crisis could lead to increased social and political unrest, similar to recent protests seen in Kenya, Nigeria, and Madagascar. He urged governments to prioritize support for small and medium-sized enterprises (SMEs), which are often the backbone of job creation, and to adopt policies that promote more inclusive and sustainable economic growth.
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The report concludes that while Sub-Saharan Africa is on a path to recovery, achieving long-term prosperity will depend on strategic reforms that address inequality, boost productivity, and expand access to decent work for all.
