Africa has the potential for tremendous economic growth in the coming years spurred by a bourgeoning youth population, and huge reserves of natural resources, especially renewable energy transition materials.
However, a costly interplay of political instability, environmental disasters exacerbated by climate change and structural problems, especially across major economies on the continent have clipped economic growth and led to a growing number of poor and vulnerable people across the continent.
In recent times, the ripple effects of the 2020 COVID-19 pandemic coupled with the Russia-Ukraine war, the Israel-Hamas conflict and its escalation into the wider Middle-East region have worsened the economic situation with inflation rising to record levels and pushing economies on the brink of fiscal crisis.
The International Monetary Fund (IMF) in its latest report projects that Sub-Saharan Africa (SSA) will grow by 3.6% in 2024 unchanged from the figure in 2023.
However, in the forecast for 2025, the fund stated that the SSA region will grow by 4.2% in 2025.
Africa’s biggest economies (Nigeria, South Africa, Egypt) continue to experience slow growth
The ten fastest-growing economies in the region according to the IMF are;
10. Ethiopia– the IMF projects that this East African country’s economy will grow by 6.5% in 2025 from 6.1% in 2024.
- The country has witnessed a decline in economic expansion in the past years failing to reach its GDP growth high of 7.1% in 2023.
- However, growth in Ethiopia is blighted by significant exchange rate depreciation and high inflation. In 2022, inflation reached 33% but it is projected to decline to 23.9% in 2024 and 23.3% in 2025.
9. Rwanda– despite being projected to grow at the same 6.5% as Ethiopia, GDP growth in Rwanda has fallen in the past few years.
- In 2025, Rwanda’s economy is expected to grow by 6.5% down from 7.0% in 2024 and further decline from 8.2% in 2023.
- Inflation in Rwanda is one of the lowest in Africa at 4.9% in 2024 and is projected to rise to 5.1% in 2025- a huge decline from 14% in 2023.
8. Benin Republic– growth in this West African country is projected at 6.5% in 2025- unchanged from the 2024 figures and a marginal increase from the figure in 2023 where the economy expanded by 6.4%.
- Inflation in the country in 2025 is expected at 2.0% still unchanged from 2024.
7. Zambia– the IMF projects Zambia’s economy to grow by 6.6%- a massive rebound of 4.3 percentage points considering growth projections in 2024 stood at 2.3%.
- Inflation in Zambia in 2025 is expected at 12.1% a decline compared to 14.6% in 2024.
6. Niger– despite experiencing a coup in 2023, the country will see strong growth in the coming year expected at 7.3% in 2025.
- Although this represents a decline from its peak of 11.9% in 2022.
- The country has seen topsy-turvy economic growth in the past few years. Growth in 2023 declined from 11.9% in 2022 to 2.4% before rising to 9.9% in 2024.
5. Uganda– the IMF projects Uganda’s economy to expand by 7.5% in 2025 representing a steady increase since 2021 when GDP grew by 5.5%.
- In 2022, the economy grew by 6.3% before dipping to 4.6% in 2023.
- Growth projections in 2024 stand at 5.9% driven by higher gold prices, and investments in the country’s oil and gas sector.
4. Sudan– this wartorn country’s economy is expected to rebound from a contraction of (20.3%) in 2024 to a growth of 8.3% in 2025.
The country’s GDP growth in 2025 will largely be fueled by increased reconstruction spending, particularly in social services and infrastructure, along with the revival of economic activity across various sectors.
3. Senegal– the third fastest growing economy in Africa in 2025 according to the IMF is Senegal with GDP growth projected at 9.3% marking an increase from 6.0% in 2024.
- Inflation in the country is expected at 2%- a 0.5 percentage points increase from 1.5% in 2024.
- This growth is primarily driven by the development of the country’s hydrocarbon resources and a favourable economic environment, including decreasing inflation.
2. Libya– Africa’s second biggest oil producer is projected to become the second fastest-growing economy in the continent with GDP growth expected at 13.7% by the IMF.
- This is a massive increase compared to 2.4% in 2024.
- This country’s growth is underpinned by stability in the oil and gas sector however, risks to the projection include; a fragile political and security environment, the slowdown in global economic growth resulting in lower international oil prices, reducing Libya’s fiscal flexibility.
1. South Sudan– another wartorn country projected to benefit from a restart in economic activities is the IMF’s fastest-growing economy in Africa.
- South Sudan is projected to grow by 27.2% in 2025- a rebound from a contraction of –26.4% in 2024.
- Inflation in the country according to the IMF stands at 120% in 2024 but is expected to decline to 74% in 2025.
- The country infamous for wars has been enmeshed in political conflicts since 2013- just two years after gaining independence in 2011.