The World Bank expects growth in sub-Saharan Africa, as well as South Africa, to rise in 2025 and further accelerate to 2027. But it is also warning of several downside risks, including restrictive trade policies and the prospect of tepid growth among major economies.

In its latest 'Africa’s Pulse' report, the World Bank forecasts that growth in sub-Saharan Africa will edge up from 3.3% in 2024 to 3.5% in 2025 and further accelerate to 4.3% in 2026 and 2027.

This performance would be dragged down, however, by some of the regional largest economies, including South Africa, Angola and Nigeria. Excluding these countries, the rest of the subcontinent is expected to grow at 4.6% this year and speed up to 5.7% in 2026 and 2027.

Nevertheless, real income per capita in 2025 is expected to be about 2% below its most recent peak in 2015 and the bank argues that growth is still not strong enough to significantly reduce poverty.

In South Africa, GDP growth is projected to recover from 0.6% last year to a yearly average of 1.8% from 2025 to 2027. 

The International Monetary Fund recently cut its projected growth outlook for South Africa to only 1% for 2025 from 1.5% previously, on the back of trade and geopolitical disruptions.

Despite the baseline forecasts, however, the World Bank cautions risks remain tilted to the downside.

“Global growth could be lower than projected due to heightened uncertainty and the potential for substantial adverse policy shifts, particularly relating to trade policies, which could result in further trade fragmentation and dampen economic activity,” the report states.

The 'Africa’s Pulse' report does not analyse potential country-level impacts of trade disruptions on growth, but states that a preliminary analysis suggests that the indirect impacts of prolonged policy uncertainty may be more severe than the direct impacts.

The indirect impacts may materialise through several channels, including weaker growth of key trading partners, which could affect demand for African exports, especially commodity exports.

Monetary policy tightening in the largest world economies to combat tariff-induced inflation could also lead to many African countries being priced out of global financial markets, while restrictive policies could also be compounded by the loss of official development assistance.

“While the direct and indirect impacts of policy changes will materialise and evolve over time, African economies have the option to liberalise and diversify their markets, including leveraging the African Continental Free Trade Area to boost regional trade, to expand economic activity and provide jobs for young people,” the reports states.