African Economic Outlook 2025—Africa’s short-term outlook resilient despite global economic and political headwinds With the right policies, Africa has the potential to mobilize an additional $1.43 trillion in domestic resources from both tax and non-tax revenue sources, and curbing leakages ABIDJAN, Ivory Coast, May 28, 2025/APO Group/ -- Africa’s economy is projected to increase from 3.3 percent growth in 2024 to 3.9 percent in 2025, reaching 4 percent in 2026, despite mounting geopolitical uncertainties and trade tensions, the African Development Bank Group (www.AfDB.org) said Tuesday in its flagship 2025 African Economic Outlook report.  Despite the prevailing domestic and external challenges  Africa continues to demonstrate notable resilience. The report, titled “Making Africa’s Capital Work Better for Africa’s Development,” was released during the Bank Group’s 2025 Annual Meetings, taking place in Abidjan, Côte d’Ivoire. It demonstrates the continent’s capacity to weather multiple shocks while identifying pathways to unlock a vast potential for transformation.   Strong growth outlook despite global headwinds  The report presents encouraging projections despite significant challenges:  Mixed growth performance across Africa’s regions  Growth prospects vary significantly across regions: East Africa leads with a projected 5.9 percent growth in 2025-2026, driven by resilience in Ethiopia, Rwanda, and Tanzania. West Africa maintains solid 4.3 percent growth, driven by new oil and gas production coming onstream in Senegal and Niger. In the face of persistent headwinds, North Africa is expected to register 3.6 percent growth in 2025. In Central Africa, growth is projected to slow to 3.2% and Southern Africa will grow at only 2.2 percent, with its largest economy, South Africa, expected to achieve only 0.8 percent growth  Significant challenges persist. Fifteen countries are experiencing double-digit inflation, while interest payments now consume 27.5 percent of government revenue across Africa, up from 19 percent in 2019.  “Africa must now face the challenge and look inwards to mobilizing the resources needed to finance its own development in the years ahead,” said Prof. Kevin Chika Urama, Chief Economist and Vice President of the African Development Bank Group, presenting the report’s findings.   Massive domestic resource potential remains untapped   The AEO 2025 estimates that, with the right policies, Africa could mobilize an additional $1.43 trillion in domestic resources from tax and non-tax revenue sources through efficiency gains alone. Africa’s extraordinary but underutilized resource base includes:  Urgent action needed to address resource leakages  The report stresses that massive capital outflows are undermining the continent’s development. Compared to $190.7 billion of financial inflows received in 2022, Africa lost approximately $587 billion from financial leakages. Of this, around $90 billion was lost to illicit financial flows, a further $275 billion  siphoned away by multinational corporations shifting profits, and $148 billion lost to corruption.  Vice President Urama said: "When Africa allocates its own capital (human, natural, fiscal, business and financial) effectively, global capital will follow Africa’s capital to accelerate investments in productive sectors in Africa."  Key policy recommendations  "There can be no substitute to sound macroeconomic policy management, quality institutions and good governance,  and rule of law." VP Urama said, emphasizing the vital need to bolster governance.  The report also calls for comprehensive reforms across several critical areas. On fiscal revenue mobilization, it recommends enhancing tax administration through digitalization, broadening national tax bases, and strengthening social contracts with citizens to improve compliance. It advocates making natural capital accounting mandatory and enforcing domestic value retention through beneficiation requirements.   The AEO also emphasizes the need to deepen financial markets by tapping institutional savings, developing local currency bond markets, and harmonizing regulatory frameworks to facilitate cross-border investment.   The African Economic Outlook: The 2025 African Economic Outlook provides a comprehensive roadmap for unlocking Africa’s transformation potential through better mobilization and utilization of domestic capital resources.  Distributed by APO Group on behalf of African Development Bank Group (AfDB).Pictures: https://apo-opa.co/43zDmEC Download the full report:https://apo-opa.co/3Hd5aqK Media Contact:  Olufemi Terry Communication and External Relations Department Email: media@afdb.org About the African Development Bank Group: The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member states. For more information: www.AfDB.org