Sub-Saharan Africa: Key themes to watch in 2025

Here is how we see our key themes for 2025 shaping the Sub-Saharan Africa (SSA) region’s operational and investment environment.

Economic angst

We forecast inflation in sub-Saharan Africa to continue falling from its 2023 peak, with only a gradual decline through 2026. This forecast trend is based on our expectations of moderating global commodity prices, particularly oil prices, the global impacts of prior monetary policy tightening, and a high base year of comparison, partly offsetting potential currency vulnerabilities amid a strong US dollar.

Broad-based monetary policy easing is expected during 2025, although the speed and magnitude will be slower than initially anticipated. South Africa’s central bank is likely to ease its policy rate by a further 75 basis points during the first half of 2025, while the central banks of Nigeria and Zambia are likely to commence monetary policy easing later in the year.

Global events and slow fiscal consolidation present significant near-term risks to improvements in the region’s debt trajectory. Social pressures that hinder the reduction of costly fuel and food subsidies, exemplified by the widespread protests in Kenya and Nigeria in June 2024, climate events that require increased fiscal spending to repair large-scale damage, and high debt-servicing costs will continue to challenge fiscal consolidation in larger sub-Saharan African economies such as Angola, Nigeria and South Africa. Increased defense spending in the Sahel region will expand state spending, while being likely to divert resources from public investment and social protection initiatives.

Domestic discontent

Following the military coups in the Sahel — Mali in 2021, Burkina Faso in 2022, and Niger in 2023 — significant shifts in security and regulatory landscapes are likely in 2025. The security landscape is likely to be altered by the withdrawal of Western forces, a move prompted by the military leaders of these countries.

Jihadist groups are likely to expand their operations regionally, exploiting the security gaps available. The absence of foreign troops is also likely to embolden insurgent groups across Niger, Mali and Burkina Faso, intensifying attacks, targeting both military, civilian and commercial targets.

Elusive alliances

Sahelian military governments are attempting to reshape regional cooperation, including forming new security alliances. The lack of effective coordination and central command will limit the effectiveness of this, constraining scope for a unified security response.

Military governments also started enacting regulatory changes, particularly in the mining sector. Mali and Burkina Faso have introduced new mining codes, while all three countries, including Niger, have suspended or withdrawn licenses for foreign mining firms. This shift reflects a more-protectionist stance and a pivot from previous foreign partnerships, posing new regulatory and operational challenges for companies operating in the Sahel, which are likely to continue in 2025.

Trade and investment reordering is to continue, with Gulf Cooperation Council (GCC) countries deepening their presence in sub-Saharan Africa. Investment from GCC countries is highly likely to reach record levels in 2025, continuing a trend of increasingly substantial funding.

The Pan-African Payment and Settlement System will enhance implementation of the African Continental Free Trade Area by facilitating cross-border transactions for 24 countries where payments can be made in domestic currency, boosting intra-African trade.

Trade troubles

Global trade rivalries threaten escalated protectionism between the US, the EU and mainland China. Where exempted from tariffs, sub-Saharan African countries will have opportunities to expand their role from a sourcing perspective as supply chain decision-makers look to mitigate geopolitical risk. Countries with stable business environments and low labor costs would be preferred in this process.

Even with recent social unrest and temporary reversals to planned fiscal consolidation, Kenya may be particularly advantaged if a trade deal can be reached with the US. A wider extension beyond September 2025 of the US African Growth and Opportunity Act (AGOA), which provides enhanced access to the US market for qualifying African states, would provide sub-Saharan African countries with cost advantages if the US moves as planned toward blanket tariffs.

Global rivalries will also impact critical minerals. To date, sub-Saharan African supplies of critical minerals have been flowing primarily to mainland China, although GCC countries’ investments are likely to rebalance this over a three- to five-year horizon, as new projects are developed under GCC sponsorship. Sub-Saharan African countries also have scope to benefit from EU and US investments. Given domestic capacity limitations, it appears harder for sub-Saharan African countries in general to apply domestic localization, value-chain capturing strategies such as those applied by Indonesia’s untreated raw material export ban.

Climate change and water resources will continue to challenge agricultural supply chains in sub-Saharan Africa, as will the eventual implementation of the EU’s Deforestation Regulation, which has been pushed back by a year due to information flow challenges. Global firms are likely to increase their investments in information gathering in the region given their future obligations under EU regulations.

Infrastructure development is being prioritized to eliminate the non-tariff barriers that currently hamper trade within Africa. Major projects include the Lobito Railway Corridor under development to connect Angola, Zambia and the Democratic Republic of the Congo (DRC), with a five-year timeline for construction. 

Click here for our global report on 2025 themes