Africa’s economic resilience continues to draw global attention as the African Development Bank Group (AfDB) projects that the continent could mobilise an additional $1.43 trillion in domestic resources, driven by effective reforms and reduced financial leakages. According to its 2025 edition of the African Economic Outlook (AEO), released during the Bank’s Annual Meetings in Abidjan, Côte d’Ivoire, Africa’s GDP is set to rise from 3.3 percent in 2024 to 4 percent in 2026, reflecting a resilient growth trajectory amid global uncertainties.
The AEO, titled Making Africa’s Capital Work Better for Africa’s Development, presents a sober but optimistic roadmap for transforming the continent’s capital utilisation. It calls for decisive reforms across tax systems, natural resource management, institutional savings, and governance frameworks. The report notes that 21 countries are projected to exceed 5 percent growth in 2025, while Ethiopia, Niger, Rwanda, and Senegal may surpass 7 percent, the threshold commonly associated with meaningful poverty reduction and inclusive economic progress.
East Africa is forecast to lead with 5.9 percent growth during 2025–2026, buoyed by the dynamism of economies such as Ethiopia, Rwanda, and Tanzania. West Africa will maintain a solid 4.3 percent, bolstered by oil and gas developments in Senegal and Niger. North Africa is expected to post 3.6 percent, Central Africa 3.2 percent, and Southern Africa lags with just 2.2 percent, weighed down by South Africa’s anaemic 0.8 percent growth projection.
Despite this mixed performance, the continent’s long-term economic potential remains strong. The report underscores Africa’s massive untapped capital base, which, if efficiently harnessed, could fundamentally shift its development trajectory. According to the AEO, the key sources of this domestic capital include:
- Natural capital: Africa holds 30 percent of global mineral reserves and stands to gain over 10 percent of the projected $16 trillion in revenues from green minerals by 2030.
- Human capital: With a median age of 19, the continent has a significant demographic dividend, estimated to add $47 billion to GDP through increased workforce participation.
- Financial capital: Pension fund assets have grown to $1.1 trillion, and if transfer costs decline, formal remittances could reach $500 billion by 2035.
- Business capital: The full implementation of the African Continental Free Trade Area (AfCFTA) could enhance exports by $560 billion and boost income by $450 billion across Africa by 2035.
However, these opportunities are tempered by extensive capital outflows. The report highlights that while $190.7 billion in financial inflows were recorded in 2022, a staggering $587 billion exited the continent through leakages. Of this, $90 billion was attributed to illicit financial flows, $275 billion to profit shifting by multinational corporations, and $148 billion lost to corruption. The scale of these losses significantly undermines Africa’s capacity to finance its development autonomously.
The AfDB report places strong emphasis on the need for digitalisation of tax systems, broadening tax bases, and fostering social contracts to improve public compliance and trust. It further advocates for mandatory natural capital accounting and enforcing domestic value addition through beneficiation frameworks. Additionally, to deepen Africa’s financial markets, it recommends mobilising institutional savings, nurturing local currency bond markets, and establishing harmonised regulatory systems to promote cross-border investments.
According to Kevin Chika Urama, AfDB’s Chief Economist and Vice President, Africa’s development trajectory must be owned and financed internally. “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,” he stated.
Beyond growth metrics, the AEO underscores the pivotal role of sound macroeconomic policy, strong institutions, transparent governance, and rule of law as non-negotiable pillars for sustained development. Interest payments now account for 27.5 percent of government revenues—up from 19 percent in 2019—while 15 countries face double-digit inflation, compounding fiscal pressures.
Africa’s projected growth is expected to outpace most global regions, save for emerging and developing Asia, positioning it as a future economic anchor. However, the full realisation of this vision demands urgent reform, better utilisation of existing capital, and an end to systemic leakages.
The AfDB’s latest assessment provides not only a macroeconomic snapshot, but a strategic template for African-led growth, offering a powerful counter-narrative to the dependency paradigm. With policy clarity and implementation, Africa has the tools to chart a prosperous and inclusive future.
