Africa’s Fragile Recovery: Growth Returns but Jobs and Debt Still Weigh Heavily

The World Bank’s Africa’s Pulse (Fall 2025) reports that Sub-Saharan Africa’s growth is rebounding modestly but remains too weak to cut poverty or create enough jobs, with debt distress and slow structural reform weighing heavily. It urges bold action to boost infrastructure, governance, and private-sector dynamism to turn the continent’s demographic boom into inclusive prosperity.

The World Bank’s Africa’s Pulse, Fall 2025 (Vol. 32), a flagship analysis by the Office of the Chief Economist for the Africa Region, the Macroeconomics, Trade, and Investment Global Practice, and the Development Research Group, delivers a nuanced portrait of Sub-Saharan Africa’s economy. The report forecasts growth rising from 3.5% in 2024 to 3.8% in 2025 and averaging 4.4% through 2027. Thirty of forty-seven countries have seen upward revisions, with notable gains in Ethiopia, Nigeria, and Côte d’Ivoire. The revival stems from easing inflation, currency stabilization, and recovering private demand, but fiscal constraints still choke momentum. The authors warn that despite the brighter outlook, growth remains far too weak to reduce poverty or absorb the continent’s swelling labor force.

Inflation Falls, but Debt Shadows Linger

After two turbulent years, inflation is finally receding across Africa. The median rate dropped from over 9% in 2022 to about 4.5% in 2024 and is expected to hover near 4% in 2025–26. Lower food and fuel prices, food down 4% and oil down 16% year-on-year by August 2025, alongside firmer exchange rates, are restoring stability. Still, nine economies, including Angola, Ethiopia, Ghana, and Nigeria, face double-digit inflation, leaving policymakers cautious. Fiscal indicators are improving, but debt-service costs weigh heavily. Interest payments now outstrip health or education spending in nearly four-fifths of the region’s countries. Total public debt stands at roughly 58% of GDP, up from 36% in 2014, while nearly half of all Sub-Saharan economies are in or near debt distress. Despite modest progress in restructuring Ghana, Zambia, and Ethiopia’s obligations under the G20 Common Framework, the process remains slow and uneven. The report calls for stronger debt transparency, predictable creditor coordination, and tighter fiscal management to avert another solvency crisis.

Global Headwinds, Local Resilience

The global environment offers little comfort. World growth is projected to slow to 2.3% in 2025, weighed down by trade disruptions, sticky inflation in advanced economies, and soft commodity prices. Brent crude is expected to average $66 per barrel in 2025 and $61 in 2026, squeezing revenues for exporters but easing import costs for others. Despite this, high-frequency data signal resilience within Africa: Nigeria’s business activity has strengthened on service-sector gains; Ghana’s disinflation and rising orders hint at renewed confidence; and Ethiopia’s agriculture and industrial parks anchor growth. Côte d’Ivoire and Benin continue to benefit from diversification and infrastructure investment. Excluding the three largest economies, Nigeria, South Africa, and Angola, the rest of Sub-Saharan Africa is set to grow by almost 5% in 2025, a sign that smaller, reform-driven nations are quietly powering the continent’s recovery.

Poverty Persists Despite Progress

The social picture remains deeply troubling. Using the new global poverty line of $3 per day (2021 PPP), Sub-Saharan Africa’s poverty rate peaked at 50% in 2024 and will decline only slightly to 48.4% by 2027. Yet the number of poor will rise from 576 million in 2022 to 671 million by 2027 due to rapid population growth. The region now accounts for about 72% of the world’s extreme poor, heavily concentrated in Nigeria, the Democratic Republic of Congo, Ethiopia, Sudan, and Tanzania. Fragile and conflict-affected states continue to suffer the most severe reversals. The report cautions that even with steady growth, poverty reduction will lag without structural transformation and better-quality jobs.

Jobs, Infrastructure, and the Future of Work

The special focus of this edition, “Pathways to Job Creation in Africa”, delivers a clear message: the continent’s growth model is not creating enough decent jobs. Between 2025 and 2050, Africa’s working-age population will expand by more than 620 million people, accounting for three-quarters of the net global increase. Yet, historically, every 1% rise in GDP has boosted wage employment by only 0.04 percentage points. About 73% of African workers remain in self-employment or unpaid family roles, and fewer than one in four hold wage-paying jobs. To reverse this, the report outlines a three-pronged strategy. First, build reliable infrastructure and skills systems, from affordable electricity and digital connectivity to efficient transport and market-linked training. For example, frequent power cuts in South Africa have cut employment by more than one percentage point, underscoring how energy reliability drives job creation. Second, foster a better business environment by simplifying taxes, enforcing fair competition, and deepening local capital markets. The African Continental Free Trade Area could be a game-changer if countries harmonize regulations and open their markets. Third, strengthen governance and institutions to combat corruption, enforce contracts, and ensure policy consistency that encourages private investment.

The report identifies key job-creating sectors: agrifood processing, energy-transition minerals such as copper and cobalt, tourism, construction, housing, health care, and digital services. Tourism employment has rebounded faster than the global average since 2022, while agribusiness and housing can generate millions of jobs if logistics and financing gaps are closed. The health sector, facing chronic worker shortages, and digital industries, spanning fintech and business outsourcing, hold cross-cutting potential for inclusive employment growth.

From Recovery to Transformation

Sub-Saharan Africa is standing at a defining moment. Policymakers must lock in disinflation gains, rebuild fiscal buffers, and channel resources into infrastructure, education, and enterprise development. Structural transformation, powering cities, connecting markets, and scaling productive firms, remains the only sustainable path to prosperity. The report’s tone is both realistic and hopeful: while the risks of “growth without jobs” remain high, credible reforms, regional cooperation, and global support could help Africa turn its demographic surge into a powerful economic dividend.