Sub-Saharan Africa’s economic performance being dragged down by Nigeria, Angola, South Africa

The World Bank on Thursday said economic activity in Sub-Saharan Africa is projected to edge up from 3.3 per cent in 2024 to 3.5 per cent in 2025 and further accelerate to 4.3 per cent in 2026–27.

However, the bank said the region’s economic performance is still dragged down by some of its largest countries—namely, Angola, Nigeria, and South Africa.

“Excluding these countries, the rest of the subcontinent is expected to grow at 4.6 per cent in 2025 and speed up to 5.7 percent in 2026–27. This outlook is subject to heightened risks arising from global policy uncertainty,” the bank said in its latest Africa’s Pulse report released on the sidelines of the World Bank/IMF meetings in Washington.

“As inflation cools down and converges to targets, and (global and domestic) financial conditions remain accommodative, it is expected that household consumption and investment will support the region’s growth acceleration.”

Stay Ahead with Premium Times

Add as a preferred source on Google

The bank said the contribution of government consumption will remain modest as the public sector continues to balance revenues and expenditures while managing painful trade-offs between servicing the debt burden and investing in social and physical infrastructure.

Across sectors of economic activity, the contribution of services is expected to remain robust in 2025–27, primarily driven by recoveries in information and communications technology, the financial sector, and tourism, it added.

Agriculture is expected to pick up from its lows in 2023 and 2024, thanks to improved climate conditions, infrastructure, and technology. But despite the baseline forecasts of growth acceleration in the region during 2025–27, risks to the outlook remain tilted to the downside.

“Sub-Saharan African economies will navigate an uncertain landscape amid greater policy uncertainty, which may lead to changes in the world trade order; ongoing (regional and national) geopolitical shifts that may affect commodity prices, disrupt international relations, and yield further fragmentation; reduced foreign aid budgets worldwide; and challenges posed by extreme weather events.”

READ ALSO: Aliko Dangote, others join World Bank’s private sector investment lab

In per capita terms, growth in the region has been inadequate to yield significant reductions in extreme poverty, the report said.

Real income per capita in 2025 is expected to be around 2 per cent below its most recent peak in 2015. The per capita growth acceleration expected in 2025–27, at an annual average rate of 1.8 per cent, will contribute to a modest decline in the poverty rate.

The World Bank said forecasts indicate that after reaching a peak of 43.9 per cent in 2025, poverty, measured at $2.15 per capita per day in 2017 international purchasing power parity, will drop to 43.2 percent in 2027. Limited investments in income-generating sectors for the poor, lingering effects of past inflation, and the probable reduction of donor aid budgets worldwide pose a challenge for poverty reduction.

Inflation

The median inflation rate in Sub-Saharan Africa declined from 7.1 per cent in 2023 to 4.5 per cent in 2024, and it is projected to bounce back slightly to an annual average rate of 4.6 per cent in 2025–27, the report said.

A deceleration of inflation was recorded by about 70 per cent of the countries in the region in 2024 and the drop for most countries can be explained by the gradual easing of supply chain pressures, the effects of contractionary monetary and fiscal policy, as well as greater currency stability.

“However, the variability of inflation across countries remains high: of 47 countries in the region, 14 still have inflation rates of two digits or more—including Angola, Ethiopia, Ghana, Malawi, Nigeria, Sudan, and Zimbabwe, among others.

“By 2027, the number of countries with two-digit or higher inflation rates is expected to fall to six,” the report said.