Nigeria as well as countries in Sub-Saharan Africa must urgently tackle its rising unemployment challenge or risk deepening poverty and social instability, the World Bank has warned in its latest Africa’s Pulse report released on Tuesday in Washington.
The biannual economic update projects Sub-Saharan Africa’s growth at 3.8 per cent in 2025, up slightly from 3.5 per cent in 2024, buoyed by easing inflation and modest investment recovery this is as it pointed out that beneath the headline growth, lies the real concern of booming unemployment.
World Bank Chief Economist for the Africa Region, Andrew Dabalen, commenting on the report, noted that, “Over the next quarter century, Sub-Saharan Africa’s working-age population will grow by more than 600 million. The challenge will be matching this growing population with better jobs, given that only 24 per cent of new workers today land wage-paying jobs. A structural shift toward more medium and large firms is essential to generate wage jobs at scale.”
According to the report, the uptick in projected growth for the region from 3.5 per cent in 2024 to 3.8 per cent in 2025 is a reflection of easing inflationary pressures and a modest recovery of investment despite persistent global economic uncertainty.
While Nigeria’s inflation remains in the doble digit range at 20.12 per cent, the report noted that the number of countries experiencing double-digit inflation has fallen sharply from 23 in October 2022 to 10 in July 2025, signaling progress in stabilising prices.
However, the World Bank report noted that downside risks loomed large, including the indirect effects of global trade policy uncertainty, declining investor appetite, and a shrinking pool of external finance, including declining official development assistance.
It pointed out that external debt service has more than doubled over the past decade, reaching 2 per cent of GDP in 2024, adding that the number of Sub-Saharan African countries in or at high risk of debt distress has nearly tripled, rising from eight in 2014 to 23 in 2025.
The pace of growth remains insufficient to meaningfully reduce extreme poverty or create the quantity and quality of jobs needed to meet the demands of a rapidly growing labour force. Africa is experiencing the world’s largest and fastest demographic shift. To harness this opportunity, countries must accelerate growth that delivers high-quality jobs, a central theme of the 32nd edition of Africa’s Pulse, the World Bank’s biannual economic update for the region, which this year focused on Pathways to Job Creation in Africa.
The report, outlining policy priorities to help countries stimulate large-scale job creation, cited that reducing the cost of doing business is critical to enable businesses to expand and new high growth firms to enter the market. “Policies that target the provision of better infrastructure – energy, digital, transport, and human capital and skills development are essential for creating an ecosystem for people and businesses to thrive. Strengthening institutions and governance can ensure stability, curb corruption, and create a predictable business environment that attracts private sector investment.
“Stimulating private sector development in sectors such as agribusiness, mining, tourism, healthcare, and housing and construction will also be key. For example, for every job created in tourism, an additional 1.5 jobs are generated in related sectors. With the right reforms and investments, Sub-Saharan Africa can unlock its vast employment potential and chart a path toward inclusive and sustainable growth.”
