Africa is poised for modest economic growth in 2025, with recovery driven by major economies such as Nigeria, Egypt, and South Africa, according to the World Economic Situation and Prospects 2025 report released by the United Nations. Despite these gains, the continent faces significant challenges, including high inflation, mounting debt, and climate-related vulnerabilities. The global economy is expected to grow by just 2.8 per cent in 2025, a stagnation from the 2024 rate and notably below the pre-pandemic average of 3.2 per cent. The report, produced by the UN Department of Economic and Social Affairs (DESA), stresses that The world economy has remained resilient through 2024, avoiding a broad-based economic contraction despite years of multiple, mutually reinforcing shocks. However, persistent structural issues such as weak investment and sluggish productivity continue to constrain global recovery. In his foreword, the United Nations Secretary-General António Guterres points out that the world continues to face “challenges that slow the rate of economic progress and the pursuit of better lives for all.” Africa's economic outlook Africa’s economic growth is forecast to improve from 3.4 per cent in 2024 to 3.7 per cent in 2025 and further to 4 per cent in 2026. This positive trajectory reflects recoveries in key economies and ongoing efforts toward regional integration under the African Continental Free Trade Area (AfCFTA). Economic growth in Africa is projected to strengthen... driven by recovery in the region’s largest economies, the report states. East Africa continues to show robust growth, while other regions face distinct challenges. Central Africa, for instance, is constrained by stagnating oil production and political instability, while high debt burdens and youth unemployment remain pressing concerns across the continent. Challenges Inflation is a major obstacle for African economies, with several countries experiencing double-digit rates. The report notes, Food inflation remains particularly persistent in developing economies, with about half of them experiencing rates above 5.0 per cent in 2024, a trend that exacerbates food insecurity in vulnerable populations. Debt servicing is also a significant burden. The report reveals that in 2024, interest payments consumed an average of 27 per cent of government revenues in Africa, up from 19 per cent in 2019. This limits fiscal space for essential investments in health, education, and infrastructure. While Africa’s growth outlook is positive, addressing structural challenges is critical for sustaining momentum. The report highlights the importance of targeted investments, inclusive governance, and enhanced regional collaboration to achieve long-term development goals. Opportunities in critical minerals Africa’s abundant reserves of critical minerals, including cobalt and lithium, present opportunities for economic growth. The report underscores that Countries with rich critical mineral reserves have immense potential to leverage these resources to stimulate economic growth and promote sustainable development. However, challenges such as environmental degradation, governance issues, and unequal benefit distribution must be addressed to realize these opportunities fully. The report emphasizes the need for sustainable practices, stating, Robust tax systems can be put in place to capture public revenues. Countries can implement fiscal rules and establish stabilization funds to manage and save excess revenues from critical minerals sectors during boom periods. Li Junhua, the Under-Secretary-General DESA, maintains that “Critical minerals have immense potential to accelerate sustainable development, but only if managed responsibly.” Call for international cooperation The WESP 2025 report calls for bold international cooperation to address Africa’s development challenges. It urges reforms in the global financial architecture to provide greater support for developing countries. Additionally, investments in renewable energy and sustainable infrastructure are highlighted as critical for fostering resilience and growth. The pursuit of net-zero emissions by 2050 will require the widespread deployment of clean energy technologies alongside universal energy access but will also entail economic, social, and environmental challenges, the report warns. “Countries cannot ignore these perils. In our interconnected economy, shocks on one side of the world push up prices on the other. Every country is affected and must be part of the solution—building on progress made,” warns Mr. Guterres, adding: In 2025, countries must deliver on those promises, particularly at the Fourth International Conference on Financing for Development.
