Reforms key to attract private investment to Africa
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Reforms key to attract private investment to Africa
Africa needs to create more economic opportunities for young people.
Sub-Saharan Africa faces heightened uncertainty due to changes in trade dynamics, regional conflict, and climate change affecting people and crops.
While the direct and indirect impacts of policy changes will materialise and evolve over time, African economies have the option to liberalise and diversify their markets, including leveraging the African Continent Free Trade Area (AfCFTA) to boost regional trade, to expand economic activity and provide jobs for young people.
Urgent reforms needed
According to Andrew Dabalen, World Bank Chief Economist for the Africa Region, there is a growing gap between people’s aspirations for good jobs and functioning public services and often sub-optimal markets and institutions.
“Urgent reforms, backed by more competition, transparency and accountability, will be key to attract private investments, increase public revenue, and create more economic opportunity for millions of Africans entering the workforce each year,” says Dabalen.
Economic growth shows resilience
Economic growth in Sub-Saharan Africa is showing some resilience despite uncertainty in the global economy and restricted fiscal space.
Regional growth is expected to reach 3.5% in 2025 and further accelerate to 4.3% in 2026-2027. This growth is mainly due to increased private consumption and investments as inflation cools down and currencies stabilise. The median inflation rate in the region declined from 7.1% in 2023 to 4.5% in 2024.
However, growth is still not strong enough to significantly reduce poverty and meet people’s aspirations – a core concern of the 31st edition of Africa’s Pulse, which focuses on Improving Governance and Delivering for People in Africa.
Real income per capita in 2025 is expected to be approximately 2% below its most recent peak in 2015.
Countries rich in resources and those facing fragility, conflict and violence are growing more slowly than more diversified economies, and the region is struggling to create enough good jobs for its young population.
Improve government efficiency
The report provides policy recommendations for African governments to maintain growth and rebuild trust in a volatile context.
“Faced with high debt and declining global aid, countries can seize the opportunity to increase the efficiency of government spending to provide better access to essential services like health, education, water and electricity.
“This would strengthen the relationship between governments and taxpayers. Improved public services, a fair tax system, stronger accountability and clear market rules will also help businesses compete, grow, and create jobs, the report states.
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Reforms key to attract private investment to Africa
