Africa’s economy is projected to increase from 3.3 percent growth in 2024 to 3.9 percent in 2025, and peak at 4 percent in 2026.
That is despite mounting geopolitical uncertainties and trade tensions, according to the African Development Bank Group’s 2025 African Economic Outlook report.
Growth prospects vary significantly across regions
East Africa leads with a projected 5.9 percent growth in 2025-2026, driven by resilience in Ethiopia, Rwanda, and Tanzania.
West Africa maintains solid 4.3 percent growth, driven by new oil and gas production coming on stream in Senegal and Niger.
In the face of persistent headwinds, North Africa is expected to register 3.6 percent growth in 2025.
In Central Africa, growth is projected to slow to 3.2 percent and Southern Africa will grow at only 2.2 percent, with its largest economy, South Africa, expected to achieve only 0.8 percent growth.
Four countries, including Ethiopia, Niger, Rwanda, and Senegal have potential to reach the critical 7 percent threshold required for poverty reduction and inclusive growth.
However, Africa loses over USD 587 billion from financial leakages, including corruption and money being siphoned overseas.
The AfDB report titled “Making Africa’s Capital Work Better for Africa’s Development” was released at the Bank Group’s 2025 Annual Meetings, held in Abidjan, Côte d’Ivoire.
It demonstrates the continent’s capacity to weather multiple shocks while identifying pathways to unlock a vast potential for transformation, showing that Africa’s projected growth rates will surpass the global average and outpace most other regions except emerging and developing Asia.
Strong growth outlook despite global headwinds
The report presents encouraging projections despite significant challenges, predicting that 21 African countries will achieve growth exceeding 5 percent in 2025.
Africa’s continued resilience is built on effective domestic reforms and improved macroeconomic management. There is growth performance across Africa’s regions
Significant challenges persist
Fifteen countries are experiencing double-digit inflation, while interest payments now consume 27.5 percent of government revenue across Africa, up from 19 percent in 2019.
“Africa must now face the challenge and look inwards to mobilizing the resources needed to finance its own development in the years ahead,” said the Chief Economist and Vice President of the African Development Bank Group Professor Kevin Chika Urama.
Related Posts
Massive domestic resource potential remains untapped
The Africa Economic Outlook 2025 estimates that, with the right policies, Africa could mobilize an additional USD 1.43 trillion in domestic resources from tax and non-tax revenue sources through efficiency gains alone.
Africa’s extraordinary but underutilized resource base include
Natural capital:
Africa hosts 30 percent of global mineral reserves and could capture over 10 percent of the projected USD 16 trillion in revenues from key green minerals by 2030
Human capital:
The continent’s median age of 19 represents a demographic dividend that could add USD 47 billion to Africa’s GDP through improved workforce participation
Financial capital:
Pension fund assets have grown to USD 1.1 trillion, while formal remittances could reach USD 500 billion by 2035 if transfer costs are reduced
Business capital:
Full implementation of the African Continental Free Trade Area could increase exports by USD 560 billion and boost continental income by USD 450 billion by 2035
Urgent action needed to address resource leakages
The report stresses that massive capital outflows are undermining the continent’s development. Compared to USD 190.7 billion of financial inflows received in 2022.
Africa lost approximately USD 587 billion from financial leakages.
Around USD 90 billion was lost to illicit financial flows, a further USD 275 billion got siphoned away by multinational corporations shifting profits, and USD 148 billion lost to corruption.
“When Africa allocates its own human, natural, fiscal, business and financial capitals effectively, global wealth will follow Africa’s capital to accelerate investments in productive sectors in Africa,” said Urama.
The 2025 African Economic Outlook provides a comprehensive roadmap for unlocking Africa’s transformation potential through better mobilization and utilization of domestic capital resources.