ABIDJAN, Ivory Coast— The African Development Bank Group released its 2025 African Economic Outlook report on Tuesday, projecting Africa’s economy to grow from 3.3% in 2024 to 3.9% in 2025 and reach 4% in 2026.
The report, titled “Making Africa’s Capital Work Better for Africa’s Development,” was presented during the Bank Group’s 2025 Annual Meetings in Abidjan, Côte d’Ivoire.
According to the report, Africa’s economy has demonstrated notable resilience despite prevailing domestic and external challenges. The continent’s growth prospects are expected to surpass the global average and outpace most other regions, except emerging and developing Asia.
Twenty-one African countries are projected to achieve growth exceeding 5% in 2025, with four countries — Ethiopia, Niger, Rwanda, and Senegal — potentially reaching the critical 7% threshold required for poverty reduction and inclusive growth.
The report highlights significant regional variations in growth prospects. East Africa is expected to lead with a projected 5.9% growth in 2025-2026, driven by resilience in Ethiopia, Rwanda, and Tanzania. West Africa is projected to maintain solid 4.3% growth, driven by new oil and gas production coming onstream in Senegal and Niger.
In contrast, North Africa is expected to register 3.6% growth in 2025, while Central Africa’s growth is projected to slow to 3.2%. Southern Africa will grow at only 2.2%, with its largest economy, South Africa, expected to achieve only 0.8% growth.
Despite the positive growth outlook, the report notes that significant challenges persist. Fifteen countries are experiencing double-digit inflation, while interest payments now consume 27.5% of government revenue across Africa, up from 19% in 2019.
Prof. Kevin Chika Urama, Chief Economist and Vice President of the African Development Bank Group, emphasized the need for Africa to mobilize its own resources to finance its development. “Africa must now face the challenge and look inwards to mobilizing the resources needed to finance its own development in the years ahead,” he said.
The report estimates that with the right policies, Africa could mobilize an additional $1.43 trillion in domestic resources from tax and non-tax revenue sources through efficiency gains alone. This includes tapping into Africa’s natural capital, human capital, financial capital, and business capital.
The report stresses the urgent need to address massive capital outflows undermining Africa’s development. In 2022, Africa lost approximately $587 billion from financial leakages, including $90 billion lost to illicit financial flows, $275 billion siphoned away by multinational corporations shifting profits, and $148 billion lost to corruption.
Vice President Urama emphasized the need for sound macroeconomic policy management, quality institutions, and good governance to address these challenges. “When Africa allocates its own capital effectively, global capital will follow Africa’s capital to accelerate investments in productive sectors in Africa,” he said.
The report calls for comprehensive reforms across several critical areas, including fiscal revenue mobilization, natural capital accounting, and financial market development. It recommends enhancing tax administration through digitalization, broadening national tax bases, and strengthening social contracts with citizens to improve compliance.
The report also advocates for making natural capital accounting mandatory and enforcing domestic value retention through beneficiation requirements. Additionally, it emphasizes the need to deepen financial markets by tapping institutional savings, developing local currency bond markets, and harmonizing regulatory frameworks to facilitate cross-border investment.
