Improving governance and delivering for people in Africa

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Policy Recommendations

To foster inclusive growth, policymakers must maintain prudent monetary policy to curb inflation while supporting economic activity. African economies should navigate trade uncertainty by diversifying markets and leveraging AfCFTA. As foreign aid declines, governments need to align fiscal consolidation with development goals, reinforce the fiscal contract through better service delivery, and adopt fair, transparent tax systems. Enhancing public trust and enabling civil society participation are vital for sustainable debt management, collective action, and improved governance.

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Monetary authorities need to reduce inflation while supporting economic activity. Over the coming months, central banks may need to manage the risks of inflation posed by domestic conditions and policy uncertainty across the globe.

While the direct and indirect impacts of trade policy changes will materialize and evolve over time, African economies have the option to liberalize 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.

Governments should prioritize and improve the governance of public services as official development assistance declines. Increasing spending efficiency, securing emergency financing, restructuring debt, and repurposing public expenditures are essential to prevent disruptions in critical sectors like health. Aligning fiscal consolidation with development goals is crucial for inclusive growth.

Governments need to consolidate efforts to reduce primary deficits to maintain sustainable public debt levels. This process should be conducted carefully because voluntary tax compliance in developing countries is influenced by the perception that tax receipts will fund public services. Citizens are more likely to pay taxes if they are satisfied with what they receive and believe they have influence over how taxes are used. Improving access, quality, and equality in public services—such as security, social services, and infrastructure—is essential to strengthen public confidence.

Tax fairness and equity are central for citizens’ trust in the fiscal contract. Policies to improve tax administration can help improve public perception of the fairness of tax collection. National debt management policies should be strengthened and governed by effective institutional arrangements that emphasize transparency, participation, accountability, and coherent decision-making.

Civil society has an important role to play in advocating for more transparent, accountable, and effective governance and fostering a rich environment for policy debates, as well as an informed and politically engaged citizenry. Civil society is at the forefront of the reform agenda on digital inclusion and digital rights, and these efforts should be supported and sustained.

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Key Findings

Economic recovery: Sub-Saharan Africa's economy is projected to edge up from 3.3% in 2024 to 3.5% in 2025 and further accelerate to 4.3% in 2026–27, driven by increased private consumption and investment. However, this growth is insufficient to reduce extreme poverty and meet people’s aspirations.

 

Declining inflation: The median inflation rate declined from 7.1% in 2023 to 4.5% in 2024, and it is projected to bounce back slightly to 4.6 percent in 2025–27. Deceleration was recorded by 70% of the countries in the region, due to gradual easing of supply chain pressures, the effects of contractionary monetary and fiscal policy, as well as greater currency stability.  

 

Conflict, Climate Change, Trade: Growth prospects in the region are held back by inadequacy of preventive and coping strategies to address conflict and climate change. Rising temperatures, anomalous rainfall patterns, and multiyear extreme weather events are repeatedly battering Sub-Saharan African countries and political unrest is increasing due to a lack of economic opportunities. Trade policy uncertainty is undermining investment and growth prospects.

 

Jobs: Governments and citizens need to strike a new social contract that increases government spending efficiency and creates an enabling environment for growing economic opportunities, including better public services, a fair tax system, and transparent market regulations to help businesses compete, grow, and create jobs.

Data

Perceptions of Government Effectiveness in Sub-Saharan Africa and Other Regions

On average, the capacity of African governments to provide public services and implement credible policies has stagnated. Delivering high quality public services and widespread economic growth will require a virtuous cycle of civic engagement and capacity building. Early establishment of goodwill by governments and commitments to serving wide power bases can help jumpstart the process. Government effectiveness captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies. For more details, please refer to datafiles available at www.govindicators.org.