A combination of tighter monetary policies, improved fiscal management, and a gradual resolution of supply chain disruptions has brought inflation under control in much of Sub-Saharan Africa, according to the World Bank’s Africa Pulse Report published in April 2025.

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“In 2024, the median inflation rate in the region dropped from 7.1 percent in 2023 to 4.5 percent,” the report noted. Looking ahead, inflation is forecast to settle at “an annual average rate of 4.6 percent” between 2025 and 2027. This downward trend was observed in about 70 percent of the countries surveyed.

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The World Bank attributes this decline largely to “the gradual easing of supply chain pressures, the effects of contractionary monetary and fiscal policy, as well as greater currency stability.”

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However, it cautioned that inflation remains uneven across the region, with 14 countries—including Angola, Ethiopia, Ghana, Malawi, Nigeria, Sudan, and Zimbabwe—still experiencing inflation in the double digits. That number is expected to fall to six by 2027.

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Central banks across the region are pursuing varying approaches. While many have paused or begun reversing rate hikes, a few are still raising rates in response to localized inflation surges.

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“Although the path of convergence to inflation targets will continue across countries, it will hit some bumps,” the Bank warned, particularly if global trade frictions, such as import tariffs, resurface.

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On the fiscal front, governments have made progress narrowing budget shortfalls. The region’s primary deficit—excluding interest payments—is projected to decline from 0.5 percent of GDP in 2024 to 0.3 percent in 2025. This trend is expected to result in “an average surplus of 0.1 percent of GDP in 2026–27.”

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Despite these improvements, governments are struggling to manage rising debt service costs.

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“Interest payments are projected to reach 3.4 percent of GDP, on average, in 2025–27,” the report stated, highlighting that 20 countries in the region spent more on debt repayments than on healthcare and education combined in 2024.

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Public debt service has soared, climbing from 16 percent of government revenues in 2012 to 50 percent in 2024.

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While restructuring efforts are underway, the World Bank stresses that further reforms are essential: “Governments need to continue conducting liability management operations, improving fiscal balances, and implementing growth-enhancing structural reforms.”

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The report also draws attention to shifting patterns in debt financing. Sub-Saharan Africa is expected to pay about “US$20 billion in interest on outstanding public and publicly guaranteed external debt” in 2025. Notably, “nearly three-quarters” of this amount is owed to private lenders and Chinese creditors.

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Furthermore, principal repayments have overtaken new disbursements, leading to a sharp decline in net external financing.

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“Net financial flows from China and bondholders have decreased,” turning negative by the early 2020s. In contrast, “multilateral lending has surged,” now representing 80 percent of external funding since the onset of the COVID-19 pandemic.

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As the region continues to grapple with debt burdens and uneven inflation recovery, the World Bank’s message is clear: prudent monetary and fiscal strategies, coupled with structural reforms, will be critical in maintaining macroeconomic stability and setting the stage for inclusive growth.

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