World Bank: Sub-Saharan Africa’s Growth Strengthens but Jobs Lag Behind

Sub-Saharan Africa’s economy is showing renewed resilience, with growth projected to accelerate to 3.8 percent in 2025, up from 3.5 percent in 2024, according to the World Bank’s latest Africa’s Pulse report. The improvement reflects easing inflation, a modest recovery in investment, and steady policy reforms across several economies.

However, the World Bank warns that despite this encouraging trend, economic growth remains too weak to significantly reduce poverty or create enough decent jobs for the region’s rapidly expanding labour force. The findings were published in the 32nd edition of Africa’s Pulse, titled “Pathways to Job Creation in Africa.”

“Over the next quarter century, Sub-Saharan Africa’s working-age population will grow by more than 600 million,” said Andrew Dabalen, World Bank Chief Economist for the Africa Region. “The challenge will be matching this growing population with better jobs, given that only 24 percent of new workers today land wage-paying jobs. A structural shift toward more medium and large firms is essential to generate wage jobs at scale.”

Economic Stability Improves but Risks Persist

The report highlights encouraging signs of macroeconomic stability. The number of African countries with double-digit inflation has fallen dramatically — from 23 in late 2022 to just 10 by mid-2025 — reflecting improved monetary management and declining global food and fuel prices. Several economies, including Kenya, Ghana, Côte d’Ivoire, and Tanzania, have recorded progress in stabilizing prices while gradually rebuilding fiscal buffers.

Nevertheless, Africa’s Pulse warns that the region continues to face significant external headwinds, including tight global financial conditions, falling investor confidence, and declining development aid. Many African countries are burdened by rising debt levels: the external debt service burden has doubled over the past decade, reaching 2 percent of GDP in 2024.

Equally concerning, the number of countries at high risk of or already in debt distress has nearly tripled — from eight in 2014 to twenty-three in 2025, accounting for almost half of Sub-Saharan Africa.

“Debt vulnerabilities are constraining public investment and limiting fiscal space for social protection and infrastructure,” the report notes. “Without decisive measures to strengthen debt management and mobilize domestic resources, the region risks a prolonged recovery.”

Growth Still Too Weak to End Poverty

Although Sub-Saharan Africa’s growth rate is rising, it remains insufficient to make a dent in poverty levels. The report notes that per capita income growth continues to lag behind population expansion in many countries, leaving millions trapped in cycles of poverty.

Extreme poverty remains concentrated in fragile and conflict-affected states, where economic shocks and insecurity have displaced millions. Moreover, food insecurity and climate shocks — such as droughts, floods, and locust infestations — continue to threaten livelihoods, particularly in the Horn of Africa, the Sahel, and southern Africa.

“Africa is at a demographic crossroads,” said Dabalen. “With the right policies, the region’s youthful population could be a powerful engine for growth. Without them, it risks becoming a source of instability and underemployment.”

The Jobs Imperative: Building Pathways to Employment

The Africa’s Pulse report emphasizes that job creation is the region’s most urgent development challenge. Every year, about 12 million young Africans enter the labour market, yet only 3 million formal jobs are created. Most new workers end up in low-productivity informal work, often with unstable incomes and limited social protection.

To bridge this gap, the World Bank calls for a comprehensive strategy that prioritizes private sector development, skills training, and institutional reform.

Key policy recommendations include:

• Reducing the cost of doing business through simplified regulations, lower trade barriers, and improved access to finance for small and medium-sized enterprises (SMEs).

• Investing in infrastructure — including reliable energy, digital connectivity, and transport networks — to stimulate entrepreneurship and industrial growth.

• Enhancing education and vocational training, particularly in science, technology, and green economy skills, to better prepare Africa’s youth for modern job markets.

• Strengthening governance and transparency, reducing corruption, and improving contract enforcement to attract both domestic and foreign investment.

Unlocking Sectoral Opportunities

The report identifies several sectors with high potential to create large-scale employment if supported by targeted reforms:

• Agribusiness and food processing – which employs 60 percent of Africa’s workforce and could expand through improved value chains and regional trade.

• Tourism and hospitality – which generates strong multiplier effects; for every job created in tourism, 1.5 additional jobs are generated in related industries such as transport, retail, and entertainment.

• Mining and energy – which can provide fiscal revenue and jobs if local content and community benefits are prioritized.

• Healthcare and construction – which offer growing demand due to urbanization, population growth, and infrastructure needs.

According to the World Bank, fostering medium and large enterprises in these sectors is essential. Currently, most African businesses are small and informal, limiting productivity and access to global value chains.

“To absorb millions of new workers, Africa needs a shift from survivalist microenterprises to dynamic firms that innovate, export, and hire at scale,” the report explains.

A Call for Inclusive and Sustainable Growth

Beyond job creation, the report urges governments to pursue inclusive and sustainable growth policies that address inequality, gender disparities, and environmental resilience. Women and youth, who make up the majority of the informal workforce, remain excluded from many formal opportunities due to barriers such as limited education, lack of credit access, and social norms.

The World Bank calls for gender-sensitive reforms in access to finance, entrepreneurship support, and legal rights to ensure that women can participate fully in Africa’s economic transformation.

Climate adaptation is another critical area. With the region already facing severe droughts, floods, and energy shortages, Africa’s Pulse stresses the need for climate-resilient investments that safeguard agriculture and infrastructure while creating green jobs.

Outlook: A Region of Potential, If Policies Align

Despite persistent challenges, the World Bank remains optimistic that Sub-Saharan Africa can harness its vast potential through policy consistency, institutional reforms, and regional cooperation. With the right mix of governance, innovation, and private investment, the region could achieve inclusive growth that creates jobs and reduces poverty.

“Africa’s economic resilience is clear,” said Dabalen. “But resilience is not enough. The focus now must be on transformation — building economies that generate good jobs, protect the vulnerable, and compete globally.”

The report concludes that Sub-Saharan Africa stands at a defining moment. The coming decade will determine whether the region’s demographic boom becomes a “demographic dividend” that fuels prosperity — or a missed opportunity that deepens inequality and discontent.