Sub-Saharan Africa's economy is expected to stabilise in 2025 with a slight acceleration in growth to 3.8%, remaining stable at this level in 2026. Growth will be driven by investments, particularly in natural resources and infrastructure, and supported by private consumption. However, net export growth is projected to be slightly negative due to weakening global conditions.
Growth rates across the region will vary significantly. Ghana and Kenya are expected to grow faster than the regional average, while South Africa will remain the slowest-growing major economy. The key drivers for Ghana include rising oil and gold production, a strong service sector, and lower interest rates. Kenya's growth will be fueled by corporate investment, the services sector (especially transport and retail), and lower interest rates, though the agricultural sector will face challenges due to poor weather conditions. South Africa's growth, despite an acceleration, will be constrained by political uncertainty and limited investment growth.
The region faces three major uncertainties related to US policies. First, the future of the African Growth and Opportunity Act (AGOA), which provides duty-free access to the US market for selected Sub-Saharan countries, is uncertain. South Africa faces the highest risk of losing its AGOA status due to political issues, while other countries like Angola, Ghana, Kenya, and Nigeria have better chances but still face potential changes. Second, the scope and impact of US import tariffs pose risks to SSA economies, with South Africa and Angola being most vulnerable to potential reciprocal tariffs. Third, the US is expected to reduce development assistance to SSA, with Kenya being the most dependent on US aid and thus most vulnerable.
Higher long-term US interest rates, driven by inflationary pressures and market expectations, will increase borrowing costs for SSA countries seeking international financing. Nigeria and South Africa, which plan significant bond issuances, will be most affected.
In conclusion, while Sub-Saharan Africa's economy is expected to stabilise, it faces significant risks from US policies and global economic uncertainties. South Africa appears most vulnerable to these challenges, while other countries like Angola, Ghana, Kenya, and Nigeria have strategic importance to the US, which may provide some protection.
