The fight against inflation in Sub-Saharan Africa is yielding results, as currencies stabilize and supply chain disruptions ease, according to the World Bank’s April 2025 Africa Pulse Report.
The report highlights that “the median inflation rate in Sub-Saharan Africa declined from 7.1 percent in 2023 to 4.5 percent in 2024,” marking a notable improvement in price stability across much of the continent. The Bank projects this moderation to continue, with inflation expected to average “4.6 percent annually” between 2025 and 2027.
This regional progress, the World Bank says, is primarily due to a combination of factors: “the gradual easing of supply chain pressures, the effects of contractionary monetary and fiscal policy, as well as greater currency stability.” Around 70 percent of the countries in the region saw inflation slow down in 2024.
Still, inflation disparities persist. Fourteen out of 47 countries are grappling with inflation rates in the double digits—among them Ghana, Nigeria, Ethiopia, Sudan, and Zimbabwe. That number is expected to shrink to six by 2027, should current trends hold.
While inflation is cooling in many countries, monetary policy responses have not been uniform. Several central banks have either halted interest rate hikes or begun loosening policy, though some are tightening further in response to recent inflationary spikes. The World Bank cautions that global developments, such as a resurgence of protectionist trade policies, could complicate the disinflation process. These risks, it says, “would delay the easing cycle… thus rendering higher-for-longer interest rates.”
On the fiscal side, efforts to rein in spending are beginning to show results. Governments across the region are closing their budget gaps slowly. According to the report, “the region’s primary deficit is expected to narrow slightly to 0.3 percent of GDP in 2025,” down from 0.5 percent in 2024. By 2026–27, this could turn into “an average surplus of 0.1 percent of GDP.”
However, the pressure of debt repayments is squeezing national budgets. “Interest payments are expected to be 3.4 percent of GDP, on average, in 2025–27,” the report noted. Alarmingly, in 2024, “twenty of the 48 countries in Sub-Saharan Africa paid more in debt service than for healthcare and education combined.”
Public debt servicing has surged since 2012, when it consumed 16 percent of government revenue. That figure hit 39 percent in 2019 and now stands at about 50 percent in 2024. Although debt restructuring may bring some relief, the Bank urges continued fiscal discipline and structural reform to reduce vulnerabilities.
Sub-Saharan Africa is also facing challenges in attracting fresh external capital. The report estimates that “by 2025, the region is projected to pay about US$20 billion in interest on outstanding public and publicly guaranteed external debt.” Nearly 75 percent of this is owed to private creditors and Chinese lenders. Since 2016, principal repayments have outpaced disbursements, causing net external financing flows to drop sharply—from nearly US$38 billion per year between 2016 and 2019, to just US$18.4 billion in 2023.
As bondholder and Chinese lending has dried up, the void has been filled by multilateral institutions, which now provide “80 percent of the financing flows into the region since the pandemic.”
The report concludes that continued progress on inflation and debt hinges on sustained economic reforms, credible fiscal plans, and stable global economic conditions.
