Public Management

Moody's Predicts 4.2% Growth for Sub-Saharan Africa in 2025

Moody's Predicts 4.2% Growth for Sub-Saharan Africa in 2025
Monday, 13 January 2025 15:39

Lower inflationary pressures and eased financial conditions are expected to gradually reduce financing costs in the region, but political and climate risks could weigh on its economic outlook.

Sub-Saharan Africa's economy is expected to grow by 4.2% in 2025, up from an estimated 3.8% in 2024, according to a report published by Moody's Ratings on January 8, 2025.

The report, titled "Sovereign – Sub-Saharan Africa: 2025 Outlook Stable as Financing Conditions Improve; but Debt Costs Still High," notes that this projected growth is higher than the region's average over the past decade. The last ten years were marked by challenges like the 2014-2016 drop in commodity prices, the COVID-19 pandemic, and inflation spikes caused by the Russia-Ukraine conflict.

This growth will be driven by easing financial conditions, increased investments in infrastructure and energy, faster economic reforms, and an expanding services sector. Moody's analysts highlighted that lower inflation and reduced interest rates set by major global central banks will support more relaxed monetary policies in the region, which could gradually lower financing costs. However, these costs are expected to remain higher than before the pandemic.

Many countries will still face challenges in accessing financing. High external debt servicing needs remain a significant risk compared to available foreign exchange reserves. A sustained increase in the value of the U.S. dollar in 2025 could also raise the cost of servicing foreign currency debt.

The report mentions that South Africa and Nigeria, the region's largest economies, will continue implementing economic reforms to boost growth and financial stability. South Africa is expected to see gradual progress, supported by significant reductions in power outages. Nigeria is likely to improve its economy by making its foreign exchange market more efficient.

Economic growth in Angola and the Republic of Congo is also expected to improve in 2025, thanks to new oil and gas projects that will offset declining production from older fields.

Moody’s predicts that foreign direct investment will remain strong in countries producing raw materials essential for the energy transition, such as the Democratic Republic of Congo and Namibia. However, climate risks could hurt the economic outlook for some countries. In Zambia, persistent drought has disrupted hydropower and mining production, erasing the benefits of higher copper prices.

Political risks could also affect stability in the region. In Côte d’Ivoire, elections in October 2025 could see President Alassane Ouattara run for a controversial fourth term. In Mozambique, the opposition continues to challenge the ruling party candidate’s victory in the October 2024 presidential election.

Additional Info

  • communiques: Non
  • couleur: N/A
On the same topic
EBRD, EU, GCF, and Canada plan €65 mln ($77 mln) green loan for Crédit du Maroc. Funds to support clean energy, water treatment, and sustainable...
World Bank projects Ivory Coast could achieve 7-8% average annual growth with fiscal mobilization above 15% of GDP. Ivory Coast's tax revenue...
• NSIF denies rumors of interest in buying Chococam, saying it is focused on other projects.• Cadyst Invest, linked to Célestin Tawamba, is rumored to...
• AXA sells 80% of AXA Crédit Morocco to Stellantis’ Fidis arm• Stellantis to offer bundled car sales, financing, and insurance• Move aligns with...
Most Read
01

From Dakar to Nairobi, Kampala to Abidjan, mobile money has become a lifeline for millions of Africa...

Africa's Boundless Future: How a simple mobile phone became a pocket bank for millions
02

• WAEMU posts 0.9% deflation in July, second month in a row• Food, hospitality prices drop; alcohol,...

WAEMU Region Records Second Straight Month of Deflation, at -0.9% in July 
03

Airtel Gabon, Moov sign deal to share telecom infrastructure Agreement aims to cut costs, boo...

Gabon’s Airtel, Moov to Share Towers Under Govt-Brokered Deal
04

Vision Invest invests $700m in Arise IIP, Africa’s largest private infrastructure deal in 202...

Saudi Arabia’s 2025 Shopping List Now Includes Industrial Parks in Africa — With a $700 Million Entry Ticket
05

Even though it remains the smallest "crypto-economy" in the world, sub-Saharan Africa shows that vir...

Sub-Saharan Africa Crypto Transactions Up 52% to $205B on Inflation, Inclusion Push
Enter your email to receive our newsletter

Ecofin Agency provides daily coverage of nine key African economic sectors: public management, finance, telecoms, agribusiness, mining, energy, transport, communication, and education.
It also designs and manages specialized media, both online and print, for African institutions and publishers.

SALES & ADVERTISING

regie@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72


EDITORIAL
redaction@agenceecofin.com

More information
Team
Publisher

ECOFIN AGENCY

Mediamania Sarl
Rue du Léman, 6
1201 Geneva
Switzerland

 

Ecofin Agency is a sector-focused economic news agency, founded in December 2010. Its web platform was launched in June 2011. ©Mediamania.

 
 

Please publish modules in offcanvas position.