Key points:
- Africa’s GDP to reach 4.1% in 2026
- Growth faces global and climate risks
- Intra-African trade continues to diversify
AFRICA’S economic growth is projected to bounce back over the next two years, with gross domestic product (GDP) expected to rise by 3.8 percent in 2025 and 4.1 percent in 2026. This is according to the latest report released by the United Nations Economic Commission for Africa (UNECA) during its 57th session of the Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa, Ethiopia.
Presenting the findings, Zuzana Schwidrowski, UNECA’s Director of Macroeconomics, Finance, and Governance, said Africa’s economies have demonstrated resilience in the face of numerous challenges. However, the projected growth rates remain insufficient to achieve the continent’s social development goals.
Growth resilient but challenges persist
Despite economic headwinds, Africa is positioned as the second-fastest-growing region globally. However, Schwidrowski warned that growth continues to lag behind what is needed to make significant improvements in social outcomes, such as reducing poverty and addressing inequality.
According to the UNECA report, several external factors continue to weigh on the continent’s economic outlook. These include ongoing geopolitical tensions, global economic fragmentation, a decline in development aid, and broader global economic uncertainty. Schwidrowski noted that these risks heighten the vulnerability of African economies, even as they show promising signs of recovery.
Trade remains a mixed picture
Trade, traditionally a major driver of growth across Africa, is contributing less to economic performance compared to previous years. Nonetheless, the report highlights an encouraging trend in intra-African trade, particularly in specific sub-regions where trade has become more vibrant and diversified.
This shift is largely attributed to ongoing efforts under the African Continental Free Trade Area (AfCFTA), which aims to boost trade integration and reduce reliance on external markets. The diversification of trade products and markets within Africa is seen as a positive step towards sustainable economic resilience.
Climate change a persistent threat to growth
Climate change remains a significant threat to Africa’s development, with rising temperatures projected to reduce agricultural yields and exacerbate food insecurity. The UNECA report warns that without stronger climate adaptation strategies, the economic impacts of climate change could reverse many of the continent’s development gains.
Agriculture-dependent economies are particularly at risk, as droughts, floods, and erratic weather patterns continue to disrupt food production. The report calls for increased investment in climate-smart agriculture and sustainable development initiatives to safeguard livelihoods and promote food security.
Poverty trends show modest improvement
The UNECA report also notes that extreme poverty across the continent has declined in line with global trends. However, poverty rates remain alarmingly high in nearly all African sub-regions, with the notable exception of North Africa. Schwidrowski emphasised that sustained economic growth, combined with targeted social policies, will be crucial in reducing poverty and improving living standards across the continent.
Looking ahead: building resilience for sustainable growth
The projected rebound in Africa’s GDP growth offers hope for the region’s future. However, UNECA underscores the need for coordinated policy actions to strengthen resilience and ensure inclusive development.
Priorities for policymakers include:
- Enhancing regional trade integration through AfCFTA initiatives
- Scaling up investment in infrastructure and renewable energy
- Expanding access to financing for climate adaptation
- Strengthening governance and institutional frameworks to improve economic stability
As Africa navigates complex global and domestic challenges, UNECA urges governments to accelerate reforms that support sustainable and inclusive growth. The upcoming years offer a critical window for African nations to implement strategies that will shape a more prosperous and resilient future.
