SUB-SAHARAN Africa’s economic growth is projected to rise to 4.2 percent in 2025, up from an estimated 3.8 percent in 2024, thanks to increased investments in energy, infrastructure, and services, according to a report by Moody’s Ratings. The agency upgraded its outlook for the region’s credit fundamentals from negative to stable, citing efforts to cut debt through fiscal consolidation. However, risks remain due to political instability, environmental threats, and social unrest in key economies like Cote d’Ivoire and Mozambique.
South Africa and Nigeria, the region’s largest economies, are implementing reforms aimed at boosting creditworthiness and economic expansion. While South Africa is seeing an easing of power shortages, Moody’s notes that major improvements will take time. Nigeria, on the other hand, is pushing ahead with policies to stabilise its foreign exchange market and improve investor confidence. The region’s economic rebound follows years of global shocks, from the 2014-16 commodity crash to the Covid-19 pandemic and the inflation surge triggered by Russia’s 2022 invasion of Ukraine.
Despite the positive outlook, Moody’s warns that rising refinancing costs, inflationary pressures, and restricted access to global capital markets could derail progress. A strong US dollar in 2025 could increase foreign debt servicing costs, putting additional strain on economies. However, foreign direct investment remains strong in countries producing key commodities for the green economy. The Democratic Republic of Congo, for instance, is set to benefit from demand for minerals needed in climate change mitigation technologies.
Moody’s expects economic growth in Angola and the Republic of the Congo to strengthen in 2025, driven by new oil and gas projects. These developments will offset declining production from aging fields, helping sustain the region’s overall economic expansion.
Not all countries will experience robust growth. Rapid population expansion, coupled with environmental threats, remains a challenge. A severe drought in Zambia has already disrupted hydropower and mining output, limiting gains from rising copper prices. Meanwhile, political risks persist. Cote d’Ivoire faces uncertainty ahead of elections later this year, with President Alassane Ouattara potentially seeking a controversial fourth term.
In Mozambique, opposition leader Venâncio Mondlane—who led the biggest protests in recent history over contested election results—has returned to the country, fuelling political tensions.
While challenges remain, Moody’s sees policy reforms, investment inflows, and sectoral expansion as key drivers of sub-Saharan Africa’s economic growth in 2025. However, fiscal discipline and political stability will be crucial in sustaining momentum.
