The World Bank’s latest Africa’s Pulse report has raised concerns over Africa’s economic direction, warning that despite improved growth forecasts, the continent’s current model is failing to create enough jobs or reduce poverty.
Botswana, while praised for its sound fiscal management, has not been spared the effects of a slowing regional recovery.
According to the report, Sub-Saharan Africa’s economy is projected to grow by 3.8% in 2025, up from 3.5% in 2024, with momentum expected to reach 4.4% by 2027. However, the World Bank cautioned that this pace remains too weak to significantly reduce poverty or absorb the continent’s rapidly growing workforce. Real income per capita is expected to rise by just 1.3% next year, and the number of people living in extreme poverty is set to increase to 671 million by 2027.
“Growth in Sub-Saharan Africa has been insufficient to lead to significantly reduced extreme poverty or improved income distribution,” the report noted, underscoring the need for a shift toward more inclusive, productivity-driven development.
The report’s special focus, titled Pathways to Job Creation in Africa, calls for a new growth model anchored in medium and large enterprises, investment in human capital, and better infrastructure. It warns that 73% of employment in the region remains in informal or family-run enterprises, offering low pay and little security. Only 24% of Africans work in wage-paying jobs, and most of these are concentrated in a few Southern African economies.
While the region’s inflation pressures have eased and currencies stabilised, the World Bank says Africa’s economies are still constrained by high debt burdens, weak infrastructure, and poor governance. Nearly half of African countries (49%) are now considered at high risk of debt distress, forcing governments to spend more on debt repayments than on health or education.
In contrast, Botswana stands out as the only country in Sub-Saharan Africa assessed to be at low risk of debt distress, reflecting its strong fiscal discipline and prudent financial management. The report commends Botswana’s stable monetary policy and institutional strength, which continue to provide a buffer against global uncertainty.
However, Botswana’s 2025 growth forecast has been downgraded, suggesting a slower recovery than many of its regional peers. Analysts attribute this to soft global diamond demand, reduced regional trade, and limited job creation, especially for young people. The report stresses that even fiscally stable economies like Botswana need to diversify beyond commodities to achieve job-rich, inclusive growth.
The World Bank recommends that African governments focus on reducing energy and transport costs, expanding digital access, and strengthening governance and competition to foster private sector growth. It further emphasizes the importance of leveraging the African Continental Free Trade Area (AfCFTA) to integrate markets and expand production at scale.
“Without decisive reforms to modernize infrastructure, empower institutions, and support private enterprise, Africa’s growth will remain strong but shallow,” the report concludes.
The next phase of development, the World Bank suggests, will depend on how effectively Botswana turns its sound governance and financial discipline into broad-based opportunities for its people.
