From Victor Osula, Abuja
The World Bank has raised its 2025 growth forecast for Nigeria and Ethiopia to 3.8%, underscoring an improving macroeconomic outlook across Sub-Saharan Africa driven by easing inflation, stabilised currencies, and renewed investor confidence.
According to the Bank’s Africa Pulse report released on Tuesday, Sub-Saharan Africa is projected to grow 3.8% in 2025, up from an April estimate of 3.5%. Growth is expected to average 4.4% in 2026–2027, slightly above previous forecasts.
“These favourable conditions are fuelling a recovery in private consumption and investment,” the Bank said, while warning that fiscal consolidation and persistent debt pressures could constrain momentum.
Andrew Dabalen, the World Bank’s Chief Economist for Africa, noted that inflation has moderated significantly across the region, with median rates falling below 4%.
“Most of the currencies which were cratering relative to the U.S. dollar have now recovered and are stable,” he said at a briefing.
The bank upgraded growth forecasts for Nigeria, Ethiopia and the Ivory Coast – all major economies in the region. In total, growth prospects for 30 economies out of the 47 that comprise the region were revised upward.
The regional economic outlook, however, faces risks from trade uncertainty sparked by the policies of U.S. President Donald Trump, high debt burdens and the need to create jobs for millions of young people coming into the job market.
“Trade challenges remain very high. We don’t know how this is going to be resolved because there are lots of negotiations going on”, Dabalen said, citing the expiry of AGOA, a key trade agreement between the United States and African nations.
The World Bank urged governments to focus on the creation of good jobs by improving the general business environment, in order to nurture small and mid-sized firms.
“These jobs have to be jobs that provide a living wage and secure lives”, Dabalen said, adding that three-quarters of the jobs created in the region’s economies are in the informal sector.
Lack of employment opportunities and other grievances have sparked youth-led protests in Nigeria, Kenya and Madagascar since last year, showing the scale of the challenge for policymakers.
“The consequences of not solving these problems are hard to contemplate. They will be very disruptive, and I think we’re beginning to see the signs of it”, Dabalen said.
