The AfDB said the continent recorded economic growth of 4.4% in 2025, up from 3.5% in 2024. The report identifies Africa as one of the fastest-growing regions globally.

Growth is projected to moderate slightly to 4.2% in 2026 before recovering in 2027. The outlook reflects the impact of global supply disruptions linked to geopolitical tensions, including those in the Middle East.

The report notes that Africa’s economic performance continues to face structural constraints. These include high levels of inequality, limited industrialisation and reliance on commodity exports. Income disparities remain significant, with the top 10% accounting for up to 65% of total income in some countries.

Inflation is expected to remain elevated, averaging about 10.4% in 2026. Higher global prices for energy and food, particularly oil and fertiliser imports, are placing pressure on many economies.

Despite these challenges, the report highlights broad-based growth across the continent. More than half of African countries recorded improved economic performance in 2025. Key drivers included agriculture, industry and household consumption.

The AfDB also identified a development financing gap estimated at around $1.3 trillion annually. The report calls for increased domestic resource mobilisation, improved tax systems and more efficient public spending.

Stronger regional integration was highlighted as an important factor in improving economic resilience. The report notes that initiatives such as the African Continental Free Trade Area could support intra-African trade and reduce exposure to external shocks.

The AfDB said continued reforms in governance, financial systems and infrastructure will be critical to sustaining growth, supporting investment and improving employment outcomes across the continent.

–AfDB/ChannelAfrica–