Africa’s Gross Domestic Product (GDP) is projected to grow by 3.8% in 2025 and 4.1% in 2026, according to the latest report released by the United Nations Economic Commission for Africa (UNECA). The report, presented at the 57th session of the Conference of African Ministers of Finance, Planning, and Economic Development in Addis Ababa, provides a comprehensive outlook on the continent’s economic trajectory, underscoring both its resilience and the hurdles it must overcome.
The report, delivered by Zuzana Schwidrowski, UNECA’s Director of the Macro-Economics, Finance, and Governance Division, acknowledged the remarkable resilience of African economies in the face of global challenges. However, it emphasized that current growth rates remain insufficient to drive widespread social development across the continent, particularly given the challenges of poverty reduction and job creation.
Intra-African Trade Dynamics and Declining Growth Contributions
While some African regions have seen a more dynamic and diversified approach to intra-African trade, the overall contribution of this trade to the continent’s economic growth has notably declined when compared to previous years. This shift raises concerns about the effectiveness of regional trade agreements and highlights the need for structural reforms to strengthen intra-Africa trade ties.
Despite Africa being the second-fastest-growing region globally, the continent’s growth has largely been driven by a reduction in inflationary pressures rather than broader structural economic improvements. This means that while inflation has decreased, it has not been accompanied by the substantial economic reforms necessary for sustained and inclusive growth.
Poverty, Climate Change, and Food Insecurity Remain Key Challenges
Although extreme poverty has decreased in line with global trends, it remains disproportionately high across most of Africa. North Africa stands as the only exception where poverty levels have significantly reduced. The ongoing high poverty rates across sub-Saharan Africa continue to pose a major challenge to achieving the United Nations Sustainable Development Goals (SDGs).
The report also highlighted the growing threat of climate change, which is expected to have severe repercussions on agricultural productivity, particularly in the Sahel and East Africa regions. The adverse impacts of climate change, such as droughts, floods, and changing weather patterns, are likely to exacerbate food insecurity and poverty, leaving millions vulnerable to hunger and malnutrition. The growing unpredictability of weather patterns could undermine efforts to improve food production and disrupt local economies that rely heavily on agriculture.
The Road Ahead: Strategic Investments and Adaptation to Climate Risks
The UNECA report calls for strategic investments in green technologies, sustainable agricultural practices, and resilient infrastructure to combat the effects of climate change. As Africa continues to navigate its economic challenges, it must focus on building a more diversified and resilient economy, which can sustain growth even in the face of environmental challenges.
Governments are encouraged to take proactive steps in improving access to quality education, investing in technological innovations, and promoting economic diversification to help reduce the continent’s reliance on commodities. Furthermore, addressing the barriers to economic inclusion and ensuring that growth benefits all sectors of society will be crucial for long-term stability and development.
With the expected growth rates in the coming years, there is optimism that Africa’s economies will continue to recover and expand, but the continent’s development agenda remains tightly linked to overcoming significant internal and external challenges. Inclusive growth will depend on policy reforms, regional cooperation, and a renewed focus on addressing the looming climate crisis that threatens the livelihoods of millions.
Conclusion
Africa’s economic outlook is cautiously optimistic, but the UNECA report paints a picture of a region still grappling with substantial social and environmental challenges. With an average growth forecast of 3.8% in 2025 and 4.1% in 2026, Africa’s development path will require bold action, particularly in climate adaptation, poverty alleviation, and economic diversification, to ensure sustainable and inclusive growth for all Africans.
