By Kadiri Abdulrahman
The World Bank says economic growth in Sub-Saharan Africa has maintained momentum amid heightened global policy uncertainty.
The World Bank made this known in the October edition of Africa’s Pulse reports, biannual analysis of economic trends across Sub-Saharan Africa.
It said that following a trough in 2023, regional activity is poised to expand at 3.8 per cent in 2025, up from 3.5 per cent in 2024, and accelerate further to an annual average rate of 4.4 per cent in 2026 to 2027.
“Consumer price inflation has continued to recede across most Sub-Saharan African countries, albeit at varying speeds.
“After peaking at 9.3 per cent in 2022, the region’s median inflation rate declined to 4.5 per cent in 2024 and is projected to stabilise between 3.9 and 4.0 per cent annually between 2025 and 26,” it said.
The World Bank described jobs as the main channel through which people reap the gains of economic growth.
It, however, said that most new labour market entrants found work in low-productivity, informal sectors that offered limited prospects for rapid income growth, reduced poverty, and improved social mobility.
“Wage-paying jobs make up only 24 per cent of employment, and less if Southern Africa is excluded.
“Sub-Saharan Africa requires a new growth model anchored in medium-sized and large enterprises, which are critical drivers of productivity and job creation.
“Large-scale job creation in the region will occur when reductions in the cost of doing business enable existing enterprises to scale and attract new high-growth firms to enter the market,” it said.
It said that it could only be achieved by addressing foundational constraints to private sector development.
It said that projected growth in economic activity in the region was supported by lower inflation and improved trade.
It, however, said that fiscal consolidation and high debt service remained key risks.
“External debt service has more than doubled over the past 10 years, reaching two per cent of GDP in 2024.
“Sub-Saharan Africa is undergoing the largest and fastest demographic shift in the world and in recent history.
“Between 2025 and 2050, the region’s working-age population is projected to expand more rapidly than in any other developing region, adding more than 620 million people to its labour force.
“This represents more than three-quarters of the net increase across all emerging markets and developing economies,” it said.
The World Bank said that the region’s jobs challenge was to accelerate the creation of jobs for its fast-growing working-age population.
It said that ensuring that those jobs offer better pay, stability, and opportunities was also a challenge.
According to the World Bank, Sub-Saharan Africa requires a new growth model anchored in medium-sized and large enterprises, which are critical drivers of productivity and job creation.
“Current growth patterns are not translating into sufficient wage employment: a one percentage point increase in GDP yields only a 0.04 percentage point rise in wage employment.
“This underscores the urgency of shifting toward a more inclusive and productivity-driven growth strategy that generates better jobs across all sectors.
“The region needs more organised and efficient production systems, which depend on a greater share of medium-sized and large firms to unlock economies of scale and generate specialised, higher-quality employment,” it said.
It further said that most businesses remained small and informal, limiting their ability to create productive jobs.
“With 73 per cent of employment concentrated in own-account and family-run enterprises, the region lacks the firm size and efficiency needed to drive productivity and expand formal job creation at scale.
“This calls for a structural shift in Africa’s growth model,” the World Bank said. (NAN)(www.nannews.ng)
Edited by Sadiya Hamza