How Sub-Saharan Africa's economy is growing amid job challenges

SUB-Saharan Africa’s economy remains resilient, with growth projected to reach 3.8 percent in 2025, up from 3.5 percent in 2024.

This acceleration reflects easing inflationary pressures and a modest recovery of investment despite persistent global economic uncertainty.

The number of countries experiencing double-digit inflation has fallen sharply — from 23 in October 2022 to 10 in July 2025 — signalling progress in stabilising prices.

Yet, downside risks loom large, including the indirect effects of global trade policy uncertainty, declining investor appetite, and a shrinking pool of external finance, including declining official development assistance.

External debt service has more than doubled over the past decade, reaching 2 percent of GDP in 2024. The number of sub-Saharan African countries in or at high risk of debt distress has nearly tripled, rising from eight in 2014 to 23 in 2025 — nearly half of the region.

The pace of growth remains insufficient to meaningfully reduce extreme poverty or create the quantity and quality of jobs needed to meet the demands of a rapidly growing labour force.

Africa is experiencing the world’s largest and fastest demographic shift. To harness this opportunity, countries must accelerate growth that delivers high-quality jobs — a central theme of the 32nd edition of Africa’s Pulse, the World Bank’s biannual economic update for the region, which this year focuses on Pathways to Job Creation in Africa.

“Over the next quarter century, sub-Saharan Africa’s working-age population will grow by more than 600 million,” said Andrew Dabalen, World Bank chief economist for the Africa Region. “The challenge will be matching this growing population with better jobs, given that only 24 percent of new workers today land wage-paying jobs. A structural shift toward more medium and large firms is essential to generate wage jobs at scale.”

The report outlines a set of policy priorities to help countries stimulate large-scale job creation. Reducing the cost of doing business is critical to enable businesses to expand and new high-growth firms to enter the market.

Policies that target the provision of better infrastructure — energy, digital, transport — and human capital and skills development are essential for creating an ecosystem for people and businesses to thrive. Strengthening institutions and governance can ensure stability, curb corruption, and create a predictable business environment that attracts private sector investment.

Stimulating private sector development in sectors such as agribusiness, mining, tourism, healthcare, and housing and construction will also be key. For example, for every job created in tourism, an additional 1.5 jobs are generated in related sectors.

With the right reforms and investments, sub-Saharan Africa can unlock its vast employment potential and chart a path toward inclusive and sustainable growth.

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