ADDIS ABAB, Ethiopia (BG) – Africa’s economy is showing signs of recovery but remains vulnerable to global uncertainties, according to the 2025 Macroeconomic Performance and Outlook (MEO) report released by the African Development Bank on Friday.

The report, launched at the 38th Ordinary Session of the African Union Assembly in Addis Ababa, projects real GDP growth of 4.1% in 2025 and 4.4% in 2026, driven by economic reforms, lower inflation and improved fiscal conditions.

It warns that Africa’s growth remains below the 7% threshold needed for significant poverty reduction. The continent continues to face geopolitical tensions, climate-related disasters and protracted conflicts in regions such as the Sahel and the Horn of Africa.

Experts, including Ethiopia’s Finance Minister Ato Ahmed Shide and the African Development Bank’s Vice President Nnenna Nwabufo, stressed the need for stronger policies, infrastructure investment and regulatory reforms to sustain growth and resilience.

“As Africa navigates an increasingly complex economic landscape, policymakers must adopt a forward-looking approach to reinforce resilience and drive sustainable growth,” said Nwabufo, who represented the Bank’s President, Dr. Akinwumi Adesina.

Africa’s average real GDP growth is estimated at 3.2% in 2024, up slightly from 3.0% in 2023.

Inflation, while still a concern, is expected to decline from 18.6% in 2024 to 12.6% in 2025-2026 due to tighter monetary policy, according to the report.

“Africa’s economic resilience and growth prospects remain strong, but challenges persist,” Nwabufo added.

Fiscal deficits have widened slightly, but are projected to narrow by 2026. Debt remains high, with nine countries in debt distress and eleven at high risk.

The report highlights 24 African countries, including Djibouti, Niger, Rwanda, Senegal and South Sudan, that are on track to exceed 5% GDP growth in 2025.

Africa remains the world’s second fastest-growing region after Asia.