Africa’s gross domestic product (GDP) is projected to grow by 3.8% in 2025 and 4.1% in 2026, according to a new report by the United Nations Economic Commission for Africa (UNECA). The report was unveiled on Wednesday during the 57th session of the Conference of African Ministers of Finance, Planning, and Economic Development in Addis Ababa.
Despite this positive outlook, UNECA cautioned that current growth rates are still insufficient to drive widespread social and economic transformation across the continent. The findings, presented by Zuzana Schwidrowski, Director of UNECA’s Macro-Economics, Finance, and Governance Division, highlighted both the resilience of African economies and the persistent structural challenges that hinder sustainable progress.
Economic Resilience and Growth Trends
Africa has demonstrated remarkable resilience in the face of economic uncertainties, maintaining its position as the second-fastest-growing region in the world. The report attributed this resilience largely to a reduction in inflationary pressures, which has helped stabilize many economies. However, UNECA noted that Africa’s economic momentum remains uneven, with some regions experiencing slower recovery due to external shocks, policy constraints, and structural weaknesses.
One of the key factors influencing Africa’s economic trajectory is the evolving landscape of intra-African trade. While certain regions have made strides in diversifying trade activities, the overall contribution of intra-African trade to the continent’s economic growth has declined compared to previous years. This underscores the need for more robust policy frameworks to strengthen trade integration and maximize the benefits of initiatives such as the African Continental Free Trade Area (AfCFTA).
Persistent Socioeconomic Challenges
Although Africa’s economic growth remains promising, UNECA emphasized that it is not translating into widespread improvements in living standards. The report pointed out that extreme poverty levels, while decreasing in line with global trends, continue to be disproportionately high in most parts of the continent. North Africa stands out as the only region where poverty reduction efforts have yielded significant results.
One of the key barriers to inclusive development is the persistent gap in social infrastructure, including access to quality healthcare, education, and employment opportunities. Many African economies continue to grapple with high levels of youth unemployment and income inequality, which threaten long-term stability and social cohesion. UNECA urged policymakers to prioritize inclusive growth strategies that promote economic opportunities for all citizens, particularly vulnerable populations.
The Impact of Climate Change on Africa’s Growth
The report also highlighted climate change as a major threat to Africa’s long-term economic and social progress. Rising temperatures, erratic weather patterns, and prolonged droughts are expected to negatively impact agricultural productivity, which remains the backbone of many African economies. As a result, food insecurity is likely to worsen in several regions, exacerbating existing socio-economic disparities.
UNECA called for urgent action to address climate-related risks, including investments in climate-resilient infrastructure, sustainable agricultural practices, and renewable energy projects. It also emphasized the importance of international partnerships in supporting Africa’s transition to a more sustainable and climate-resilient economy.
Policy Recommendations for Sustainable Growth
To ensure that economic growth translates into tangible development benefits, UNECA outlined several policy recommendations:
- Enhancing Intra-African Trade – Strengthening regional trade frameworks and fully implementing the AfCFTA will be critical in boosting Africa’s economic integration. UNECA urged African governments to remove trade barriers, improve transport infrastructure, and support small and medium-sized enterprises (SMEs) to enhance competitiveness.
- Investing in Human Capital – Expanding access to quality education and vocational training will help equip Africa’s growing youth population with the skills needed to drive economic transformation. UNECA emphasized the need for targeted policies that promote job creation and innovation.
- Addressing Income Inequality – Ensuring that economic growth benefits all segments of society requires policies that reduce income disparities. This includes expanding social protection programs, supporting women’s economic empowerment, and fostering inclusive business environments.
- Strengthening Climate Resilience – UNECA recommended increased investment in climate adaptation strategies, such as modernizing agricultural practices, developing early warning systems for natural disasters, and integrating climate risk assessments into national development plans.
- Boosting Financial and Economic Governance – Strengthening governance and transparency in financial management will be essential in improving economic stability. UNECA urged African governments to enhance fiscal discipline, curb illicit financial flows, and promote efficient public sector management.
Conclusion
While Africa’s economic outlook for 2025 and 2026 remains positive, UNECA’s report underscores the need for bold policy interventions to ensure sustainable and inclusive growth. Addressing persistent poverty, strengthening trade integration, and mitigating climate risks will be crucial in transforming Africa’s economic potential into tangible benefits for its people.
As African leaders and policymakers navigate these challenges, the focus must remain on creating long-term economic resilience, fostering social development, and positioning the continent as a key player in the global economy. The road ahead requires strategic investments, regional cooperation, and a commitment to addressing the structural barriers that continue to hinder Africa’s full economic potential.
