Abuja: The World Bank says economic growth in Sub-Saharan Africa has maintained momentum amid heightened global policy uncertainty. The World Bank made this known in the October edition of Africa’s Pulse reports, a biannual analysis of economic trends across Sub-Saharan Africa.
According to News Agency of Nigeria, following a trough in 2023, regional activity is poised to expand at 3.8 percent in 2025, up from 3.5 percent in 2024, and accelerate further to an annual average rate of 4.4 percent in 2026 to 2027. The report indicates that consumer price inflation has continued to recede across most Sub-Saharan African countries, albeit at varying speeds. After peaking at 9.3 percent in 2022, the region’s median inflation rate declined to 4.5 percent in 2024 and is projected to stabilize between 3.9 and 4.0 percent annually between 2025 and 2026.
The World Bank described jobs as the main channel through which people reap the gains of economic growth. However, it highlighted that most new labor market entrants found work in low-productivity, informal sectors that offered limited prospects for rapid income growth, reduced poverty, and improved social mobility. Wage-paying jobs make up only 24 percent of employment, and less if Southern Africa is excluded.
The report emphasizes that Sub-Saharan Africa requires a new growth model anchored in medium-sized and large enterprises, which are critical drivers of productivity and job creation. Large-scale job creation in the region will occur when reductions in the cost of doing business enable existing enterprises to scale and attract new high-growth firms to enter the market. This shift can be achieved by addressing foundational constraints to private sector development.
The projected growth in economic activity in the region is supported by lower inflation and improved trade, though fiscal consolidation and high debt service remain key risks. External debt service has more than doubled over the past 10 years, reaching two percent of GDP in 2024. The report also points out that Sub-Saharan Africa is undergoing the largest and fastest demographic shift in the world and in recent history. Between 2025 and 2050, the region’s working-age population is projected to expand more rapidly than in any other developing region, adding more than 620 million people to its labor force.
The World Bank asserts that the region’s jobs challenge is to accelerate the creation of jobs for its fast-growing working-age population, ensuring that these jobs offer better pay, stability, and opportunities. Current growth patterns are not translating into sufficient wage employment, with a one percentage point increase in GDP yielding only a 0.04 percentage point rise in wage employment. This underscores the urgency of shifting toward a more inclusive and productivity-driven growth strategy that generates better jobs across all sectors.
The report further states that most businesses remain small and informal, limiting their ability to create productive jobs. With 73 percent of employment concentrated in own-account and family-run enterprises, the region lacks the firm size and efficiency needed to drive productivity and expand formal job creation at scale. This calls for a structural shift in Africa’s growth model, according to the World Bank.