The World Bank has upgraded its growth forecast for Sub-Saharan Africa to 3.8% this year, driven by stable prices and policy easing.
According to the bank, the region’s robust economic performance is attributed to countries such as Nigeria, Ethiopia, and Ivory Coast.
The region’s growth is expected to accelerate to 4.4% in the next two years, slightly up from its initial forecast of 4.3%. Median inflation in the region has dropped to less than 4%, with many currencies stabilizing against the US dollar. This decline in inflation has allowed for interest rate cuts, boosting private consumption and investment.
Nigeria’s economy is expected to grow by 3.6% in 2025, driven by ongoing macroeconomic reforms. The World Bank projects Nigeria’s inflation to drop to 14.3% by 2027. Other African countries, including Ethiopia, Egypt, and Malawi, have also seen significant declines in inflation due to better agricultural output and tighter monetary policy.
The growth forecast upgrade is largely driven by stabilizing foreign exchange and inflation rates. “While this marks a gradual recovery from a decade of successive shocks, the rebound has yet to gain strong momentum,” the World Bank said in its report. The bank’s support program focuses on fiscal and power sector reforms, which are considered key to sustaining the region’s growth and macroeconomic stability.
Despite the positive outlook, the region faces challenges, including trade uncertainty, high debt burdens, and the need to create jobs for millions of young people entering the job market. Fiscal consolidation efforts could also curb the pace of recovery in some economies.
The World Bank’s upgraded growth forecast reflects the region’s resilience and potential for growth, driven by improved economic policies and stable prices. As Andrew Dabalen, chief economist for Africa at the World Bank, noted, “The median inflation is less than 4%. Moreover, most of the currencies which were cratering relative to the U.S. dollar have now recovered and are stable.”