Africa: UN predicts 3,7% growth in 2025
Africa will experience moderate economic growth in 2025, reaching only 3,7%, according to the report on World Economic Situation and Outlook for 2025, published this Thursday, January 9, by the United Nations Department of Economic and Social Affairs (UNDESA).
This performance represents a slight acceleration compared to the 3,4% recorded the previous year and is driven by more favorable global economic conditions. The economic recovery in Africa is accompanied by a gradual reduction in inflation, monetary easing in some economies, and a robust recovery in international tourism.
The report also warns of persistent risks that could compromise growth, such as high debt service costs, regional conflicts, and growing climate impacts.
The UN emphasizes the importance of a concerted approach between African governments and international partners to address these challenges. Recommendations include measures that promote economic diversification, energy transition, and increased investment in key sectors such as health and education.
Recovery in Africa
Africa's projected growth of 3,7% by 2025 represents a positive sign for the continent, especially in a global landscape marked by economic and geopolitical uncertainty. This performance is largely due to the recovery of key economies such as Egypt, Nigeria, and South Africa.
However, UN economists emphasize that this recovery is not without its challenges. One of the factors contributing to this growth is the improvement in global financial conditions, which have reduced pressure on credit markets.
Furthermore, the easing of constraints in the energy sector, especially in South Africa, has brought some relief to local economies, allowing for an increase in the production and export of goods and services. International tourism, which faced a significant decline during COVID-19, is also showing signs of recovery, generating additional revenue in several African countries.
On the other hand, the report highlights the growing pressure of public debt on the continent's economies. Many countries face historic levels of debt, making it difficult to implement expansive fiscal policies and execute infrastructure projects necessary for sustainable development.
Angola, for example, has benefited from stabilizing oil prices, but economic diversification remains a key challenge to reduce dependence on oil revenues. Another critical issue is the impact of climate change in Africa.
Extreme events, such as prolonged droughts and devastating floods, have exacerbated food insecurity and compromised the livelihoods of millions of people. The UN argues that a stronger commitment to the energy transition and mitigating climate impacts could not only protect the continent but also generate new economic opportunities.
Challenges and Perspectives
Despite optimistic forecasts, Africa faces significant structural challenges. Poor governance and unsafe labor practices pose risks that could undermine long-term benefits, but one of the main impediments to growth is fragile supply chains and excessive dependence on raw material exports.
Economies heavily dependent on resources such as oil, gas, and critical minerals are particularly vulnerable to price fluctuations in the international market. Furthermore, economic inequality among African countries continues to be a barrier to progress.
While some economies, such as Cape Verde and Mozambique, have growth rates above the regional average, others, such as Equatorial Guinea, continue to experience negative performance. These disparities reflect differences in available natural resources and the effectiveness, or ineffectiveness, of the economic policies implemented in each country.
The debt problem is another key obstacle. The UN warns that many African countries are trapped in a "debt trap," where high debt service costs consume a large portion of public budgets, limiting investment capacity in critical social sectors.
To alleviate this pressure, the report recommends bolder multilateral action, with measures including debt relief and increased international financing for sustainable development. Finally, the energy transition presents a unique opportunity for Africa.
The continent possesses vast reserves of critical minerals needed for clean energy technologies, such as lithium and cobalt. If exploited responsibly and sustainably, these resources can boost economic growth, create new jobs, and increase government revenue.
Conclusion
Africa's projected economic growth in 2025 offers a moderately optimistic outlook for the continent. Despite structural challenges and geopolitical risks, the recovery of Africa's major economies and more favorable global economic conditions create a favorable environment for development.
However, to ensure that this growth is inclusive and sustainable, it is essential that African governments implement policies that promote economic diversification, energy transition, and climate change adaptation.
International cooperation, in turn, should focus on debt relief, financing social projects, and creating mechanisms that ensure an equitable distribution of economic benefits.
With a joint and sustained effort, Africa has the potential to transform current challenges into opportunities, strengthening its position as one of the main engines of economic growth worldwide.
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Picture: © 2013 DR
