Over the last 20 years, Africa has been one of the fastest-growing regions in the world, with an average GDP growth of between 3.5 and 4.5 percent each year. As we move toward 2026, the outlook for growth still looks positive.
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The World Bank's 2024 report says that the sub-Saharan region grew by 3.8 percent that year, and is expected to grow between 4.1 and 4.3 percent in the 2026 to 2027 period.
But these high numbers do not show the real situation for most people.
Over 460 million Africans still live in extreme poverty, with less than $2.15 a day, which is more than it was 15 years ago, even though the economy is growing.
This is a confusing situation for economists: why is the economy growing, but the lives of the average person are not improving?
Even in countries doing well, such as Tanzania, Rwanda, and Ethiopia, growth is happening in areas like infrastructure, transport, and financial services.
But for poor families, the cost of living, inflation, low wages, and unstable jobs make it hard to earn a living. The gap between the digital economy and the everyday economy keeps getting bigger.
This problem comes from long-standing economic, social, and policy systems that have been based on exploitation or dependency.
Even when countries get big loans or aid from outside, the money often doesn't help local production.
Instead, it goes toward paying off debts, high government salaries, or projects that don't help people much. That's why, even with growth, it's not shared by everyone.
The main issues are employment, the growing population, and the high cost of living, all of which keep poverty from going down.
The first challenge is that the growth isn't creating enough jobs.
The World Bank shows that for every 1 percent of GDP growth in Africa, poverty falls by only 1 percent on average, while the global average is over 2.5 percent.
This means Africa's economy is driven more by sectors that don't create many jobs, like mining, government operations, or large financial deals.
On the other hand, sectors that employ a lot of people, like agriculture, are not productive.
They lack modern technology and don't bring in much money for farmers. Even though agriculture employs more than 55 percent of people in Africa, it only contributes less than 20 percent of GDP in most countries.
The continent's population is also growing very fast.
According to the United Nations, Africa adds about 30 million people every year.
This is good for the workforce but puts a lot of pressure on jobs, food, housing, education, and healthcare.
While the economy is growing at 3.5 percent, the population is growing at 2.7 percent, which reduces the benefits of growth for individuals. That's why, even when there's growth, many people's lives don't change much.
The cost of living is another big problem.
The Africa Pulse report from April 2024 shows that food prices in many East African countries are over 20 percent higher, with basic items like flour, cooking oil, sugar, and beans at their highest levels in seven years.
This means that even if people get jobs, their wages are eaten up by rising prices.
Countries like Nigeria, Ghana, Ethiopia, and South Africa are dealing with currency devaluation, which makes imported goods more expensive.
So, the economy is growing, but people aren't seeing any real improvement in their lives.
Another challenge is that many African countries depend more on foreign money than on their own production.
IMF data for 2025 shows that more than 20 countries on the continent are at risk of not being able to pay back their debts or are already in trouble with their debts.
In some countries, more than 40 percent of government money goes to paying interest and repaying debts instead of helping people or growing the local economy.
For example, Ghana spent over 50 percent of its domestic income on debt in 2024, which forced big economic changes.
In East Africa, many countries, including Tanzania, Kenya, and Uganda, depend a lot on grants or low-interest loans to fund their budgets.
In the 2024/25 financial year, Tanzania used almost a quarter of its budget from foreign sources.
Being dependent on foreign countries isn't necessarily bad, but it creates an economy that isn't self-reliant.
When loans are delayed or conditions become tough, local investment stops, jobs don’t grow, and the economy doesn't expand.
The kind of investment that comes in also matters.
African cities have seen big projects: new roads, bridges, airports, and skyscrapers. But these usually don’t create lasting jobs once the projects are done. Many of the jobs are temporary.
Without strong industrial sectors, productive agriculture, technology, and high-value production, Africa will keep seeing high GDP growth without real benefits for ordinary people.
Economists call this "jobless growth."
Policy, governance and income equality at the end of the African puzzle
A final factor that exacerbates the problem is the governance and distribution of resources. African Development Bank reports show that more than 65 percent of new wealth on the continent goes to the top 10 percent of the population.
This means that even when the economy grows, the pie is not shared equally. Lack of effective tax systems, revenue leakage, corruption, and political favoritism mean that the money that is available does not benefit many.
Furthermore, many economic policies on the continent are based on short-term plans rather than a 20-year and longer-term domestic production plan.
It is difficult to reduce poverty without an industrial economy, without an agricultural value chain, without skills education for youth, and without social systems that protect the poor.
Even when governments have the best plans in place, implementation is often hampered by political changes, debt interest, or lack of resources.
In other words: the economy is growing, but it's slipping down before it reaches the people.
That is why, despite the high expectations for 2026, the future of poverty reduction will depend on the ability of African countries to transform the structure of their economies not only to increase growth, but to make that growth inclusive, employment-rich, productive and equitable.
As we move towards 2026, the picture becomes clear: Africa is growing numerically, but not in terms of quality of life.
The problem is not the speed of growth, but its quality. The only question that remains is this, Africa can grow, but can it make its people rich?