Addis Ababa, 17 March 2025 (ECA) - The ECA’s Economic Report on Africa (ERA) notes that Africa’s growth is expected to gradually recover to 3.8% in 2025 and 4.1% in 2026 on the back of increased private consumption and improved trade performance.
However, while growth has rebounded, it remains subdued and is still below the level needed to improve people’s living standards and reach the Sustainable Development Goals (SDGs), the report says.
Risks to Africa’s growth are heavily tilted to the downside, due to global economic tensions and fragmentations, including risks of an escalated US-China trade war, transnational, regional and domestic conflict, and more frequent and intense climate shocks.
Although Africa’s aggregate debt-to-GDP ratio is estimated to have declined from 67.3% in 2023 to 62.1% 2025, debt levels remain unsustainably elevated. Concerns over a debt crisis remain, and unfairly high borrowing costs are crowding out essential development outlays. This has fuelled calls for reform of the global financial architecture.
The good news is that the share of Africans living in extreme poverty (at an international poverty line of $2.15 per day) has been gradually declining. However, the number of people living in poverty has increased to an estimated 468 million, exacerbated by recent crises.
The report found that Africa can boost resilience by accelerating climate action, which is taking a huge toll on human life and economic growth. In 2022, weather, climate, and water hazards directly affected more than 110 million individuals on the continent, resulting in economic losses exceeding$8.5bn.
With almost 76 million young Africans not in employment, education or training, the need to invest in skills development is particularly critical, the report argues. These investments are essential for Africa’s growth and resilience, given the continent has the world’s youngest workforce.
The risk of escalated global trade wars presents a chance for Africa to turn inward and boost intra-regional trade and self-reliance through the AfCFTA, the report states.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org