African economies are expected to remain resilient despite mounting risks from geopolitical tensions, tightening global financial conditions, and structural vulnerabilities, according to the latest Macroeconomic Performance and Outlook report from the African Development Bank (AfDB).<\/p>\n
But while the report indicates that growth across the continent has strengthened and remains broad-based, the AfDB concludes that it is still not sufficient to drive the level of structural transformation and poverty reduction required.<\/p>\n
Sidi Ould Tah, president of the AfDB, noted the challenging global environment, which is putting African economies under further strain. Despite these headwinds, the report pointed to encouraging signs of resilience across the continent in 2025.<\/p>\n
“The growth of Africa in 2025 was around 4.2%, better than the previous year. Out of 54 countries, 32 registered stronger growth than the previous and 22 of them grew above 5%,” Tah pointed out.<\/p>\n
Growth is expected to improve further, reaching 4.3% in 2026 and 4.5% the following year.<\/p>\n
This level of growth, Tah however said, is still insufficient for the continent if it is to meet its long term development goals.<\/p>\n
“Growth remains below the standard 7% threshold that Africa needs to drive stricter transformation and meaningfully reduce poverty. Per capita income growth is still not fast enough to close the gap with other regions.”<\/p>\n
Debt and aid concerns<\/p>\n
Another area of concern is the continent’s debt vulnerabilities, with 25 African countries spending more on debt repayments than in public health. In addition, there has been a reduction in overseas development assistance which, Tah warned, has severe consequences for countries where grants account for at least 40% of government revenue.<\/p>\n
The continent is however seeing an increase in inbound financing, Tah observed. <\/p>\n
“Foreign direct investment rebounded sharply in 2024, rising by more than 70% to reach $97bn.” <\/p>\n
Remittances also continued to grow, reaching $104.6bn, and according to the report was “the largest single source of external non-debt financing, surpassing FDIs,” while inbound investments also saw a net increase after years of net outflows.<\/p>\n
“The resources exist. The challenge is to mobilise them on Africa’s terms,” Tah argued. <\/p>\n
Presenting the highlights of the report, Kevin Chika Urama, the AfDB’s chief economist and vice president for economic governance and knowledge management, noted that at 4.2%, Africa’s growth in 2025 surpassed the global average of 3.1%. More encouragingly, the growth was broad-based, with 32 African countries posting positive growth. Urama revealed that “22 African countries grew beyond 5%, while 6 met the threshold of 7%.”<\/p>\n
“Despite these positive GDP growth rates it is still not enough to be able to drive structural transformation and job creation on the continent,” Urama said, stressing the need to continue investment in job creation “so that we can turn Africa’s demography into a dividend for Africa”.<\/p>\n
Debt, however, remains a key concern. <\/p>\n
“The high cost of debt, the changing structure of debt, and also the dominance of the dollar in Africa’s external debt has continued to put pressure on debt servicing,” Urama said, while clarifying that while the debt-to-GDP ratio is going down, vulnerabilities persist “not because of the quantum of debt, but because of the structure of debt, the cost of debt, and debt refinancing risks.”<\/p>\n
Urama also warned of trade and supply chain problems and rising energy, food, and fertiliser prices from the war in Iran. Poorer countries, he said, will be the hardest hit, while some 29 countries are already experiencing currency devaluations.<\/p>\n","protected":false},"excerpt":{"rendered":"
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