2025: Year in Review

Political and economic divergence on the Continent continues apace

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To close the year, this post reviews the calls I made early this year in my “Africa in 2025” post (in bold), with thoughts on what actually happened.

I: Economics

(1) African economies will dominate the list of the fastest growing economies in 2025, in a continuation of the post-Covid recovery. 44 African countries will grow faster than the global average (3.2%) this year. Among the best performers, Côte d’Ivoire, Tanzania, Senegal, Benin, and Rwanda remain terribly underrated as investment destinations.

As a region, African economies grew by 4.1% in 2025. Cote d’Ivoire (6.4%), Tanzania (6%), Senegal (7.9%), Benin (7%), Rwanda (7.1%) were among the top performers. Others included countries coming out of conflict, political crises, or which started massive investments in natural resource exports — including South Sudan (24.3%), Ethiopia (7.2%), Guinea (7.2%), Uganda (6.4%), and Zimbabwe (6%).

Source: IMF

The improving macroeconomic situation in the region was also reflected in the declining cost of credit for African sovereigns — even though the challenges of failed rapid job creation and inability to convert growth into development remain.

In a related development, I had not anticipated the huge cuts in foreign aid (led by the U.S. government) in 2025. As a result, two big pieces of information emerged. First, there is a disconnect between the international Aid Industrial Complex and most informed people in aid-receiving countries. For the former, the sky fell with the aid cuts. Among the latter, the cuts presented an opportunity to reform how aid is delivered in order to improve its impact on improvements in human welfare. Moving forward, I hope the latter camp’s correct perspective will prevail.

Second, the sky did not fall after the aid cuts. Do not get me wrong. Lots of people were left high and dry by the brutal and cavalierly erratic cuts. People died. Livelihoods were destroyed. Yet it was not nearly as catastrophic as many (including yours truly) had feared. This calls for (i) an appreciation of the resiliency of aid-receiving communities (and a willingness to reform the global aid industry without unnecessarily vetoing such efforts for fear that the sky will fall); and (ii) a rethink of whether the aid sector is as efficient as it could be in both spending cash and collecting accurate data. It’s not a good look when so many aid projects obviously lack a reasonably accurate understanding of their contexts or ability to collect reliable data in real time.

(2) Côte d’Ivoire and Tanzania present the perfect mix of sectoral drivers of growth — agriculture, hydrocarbons, infrastructure, logistics, banking, and telecoms (plus tourism for Tanzania). Based on the fundamentals, these two are currently slightly ahead of their neighbors Ghana and Kenya (which are the two other African economies most likely to experience real takeoff in the next 30 years).

While the economic fundamentals remain unchanged, in 2025 both Cote d’Ivoire and Tanzania saw the emergence of high policy uncertainty due to politics. In Cote d’Ivoire, President Alassane Outtara (83) got himself elected for a fourth term, thereby stalling the country’s political development by extending uncertainties around his succession. Despite being West Africa’s top economic performer, the Ouattara succession will continue to cast an unnecessary shadow on Ivorian political and economic development.

In Tanzania, October’s election — in which some pre-election polls pointed to a comfortable CCM win — was marred by violence that has significantly dented the government’s legitimacy. This, in turn, will likely negatively impact the ruling party’s ability to focus on its development agenda, which includes implementation of the admirably ambitious DIRA 2050 (more on this in a future post).

(3) Among the new hydrocarbon producers on the Continent, Senegal will be the most interesting economy this year.

In 2025 the Senegalese economy is projected to grow by almost 8% on the back of strong performance in the agricultural sector and new hydrocarbon investments. At the same time, runaway public debt will weigh down the government’s ability to convert the impressive growth into human development. According to the IMF:

Senegal continues to face significant debt pressures. Total public sector debt is estimated at 132 percent of GDP at end-2024, including 4 percent in domestic expenditure arrears pending the results of the ongoing audit by the Inspectorate General of Finance. The authorities are pursuing active debt-management operations, both on domestic and external debt, to reduce debt-related vulnerabilities. In addition, both parties exchanged views on several options to address the fiscal and debt-management challenges highlighted by the findings of the public finance audit.

Senegal’s future performance will depend on the state’s ability to clean up the fiscal mess created by previous administrations and proper management of hydrocarbon windfalls. Both will require skillful management of sky-high public expectations and the temptation to borrow against future revenue flows. Senegal should take the lessons from Ghana’s experience to heart.

(4) One the biggest economic news of 2025 will be Ethiopia’s ongoing liberalization efforts. The government already opened up the telecoms sector. A stock exchange will open this year for the first time since the imperial era. And there are plans to open up banking following last month’s passage of a law allowing foreigners to acquire stakes in local banks. Shareholding by foreign investors will be limited to 30% for individuals and 40% for firms.

I must admit that at the beginning of the year I was skeptical about Ethiopia’s ability to execute on much-needed macro reforms. Therefore, I was pleasantly surprised to see the government push through on its reform commitments (more on this below).

While many risks remain, Prime Minister Abiy Ahmed appears go have unlocked a formula of being able to grow and implement a raft of important reforms amidst high levels of political instability. That makes a difference. Ethiopia needs all the growth it can get. And not having to wait for perfect conditions to start growing is a good thing.

(5) Exchange rate risks will remain elevated this year despite the relatively high growth and an expected uptick in foreign direct investment flows into the region.

Things turned out differently for a number of African countries. African currencies were among the best global performers in 2025 — much of it driven by “soaring commodity prices and rising economic stability.”

(6) For the 35th year running, the Chinese foreign minister’s first trip abroad (January 5-11) in 2025 will take him to the Continent, with stops in Chad, Congo, Namibia, and Nigeria.

Source: The FT

Trade and broader commercial relations are the cornerstone of the Africa-China relationship. Therefore, the most important development in 2025 was the growing trade deficit with China (like the rest of the world). Importantly, China is not yet giving up lower-tier manufacturing that could migrate to African economies (for security rather than purely economic reasons). Therefore, moving forward African countries should apply diplomatic pressure on Beijing to open up the Chinese market to more African products, and for policy support to onshore more manufacturing processes and value chains on the Continent.

II: Conflict and security

(7) Sudan’s catastrophic civil war will drag on in 2025. Over 100,000 people have been killed. Millions have been displaced. Several population centers are already experiencing famine. Meanwhile, both the Rapid Support Forces (RSF) and the Sudanese Armed Forces (SAF) continue to commit atrocities as they prosecute their respective scotched-earth campaigns.

It looks ever more likely that a “Libyan Stalemate” will characterize Sudan’s conflict into the medium term. The RSF has now conquered enough territory to divide Sudan into separately-governed territories. Meanwhile, foreign assistance to both warring camps continues to dissociate war objectives from the realities of ordinary Sudanese. That bodes ill for the future duration of the conflict (see Yemen), and the scale of violence (see the fall of El Fashir).

(8) The U.S. government will very likely recognize Somaliland. While I agree that Somalilanders have a strong case for independence, I think that recognition at this point in time would be a mistake (more on this here and here).

The U.S. ended the year without recognizing Somaliland, despite pressure from Hargeisa’s lobbyists in Washington. However, on December 26, 2025 Israel became the first country to formally Somaliland. Given the historical co-movement of U.S. and Israeli foreign policy (especially in the Middle East and wider Red Sea region), I suspect that the U.S. and many of its allies are not far behind. Even if formal recognition from Washington takes longer, the U.S. will, for all intents and purposes, treat Somaliland as a sovereign state. Zooming out, Somaliland’s economic and political stature means that it will be a cheap geopolitical date for states that offer recognition. Within the wider Eastern Africa region, the two most important capitals to watch in this regard will be Addis Ababa and Nairobi. Both have good reasons to recognize Somaliland, in addition to their individual U.A.E. connections. The U.A.E. will likely lead the charge in pressuring African states to recognize Somaliland.

(9) There is very little evidence that the quality of leadership and decision making in Mogadishu will improve this year.

President Hassan Sheikh Mohamud is the worst thing that could’ve happened to Somalia at this point in its history. It was not long ago that many analysts thought Somalia was turning a corner. Then came Mohamud with his amateurish inability to handle both domestic factional politics and foreign policy. The net result is that Al-Shaabab is on the match again and the balkanization of Somalia seems ever more irreversible.

(10) In 2025 Ethiopia’s Abiy Ahmed will struggle to shed the “Mayor of Addis Ababa” epithet.

To be fair, even his fiercest critics would admit that Prime Minister Abiy Ahmed has demonstrated staying power. And the historical evidence on regimes of this kind suggests that his staying power will only improve with time. In return, Abiy’s staying power will buy Ethiopia time for economic recovery and further consolidation of political stability. While it would be naive to assume that Ethiopia can simply grow out of its “national question” distractions, it is also the case that stability plus growth will make identity politics less zero sum. Now more than ever, Ethiopia needs to buy time. Collapse into internal chaos is not an option.

(11) When I wrote about the end of françafrique in February of 2023, I did not anticipate the rapidity with which we would see France’s influence wane throughout its former colonies.

The rapid decline of French influence in West Africa is one of the most underrated developments of the last three years. The same trend continued in 2025. It is telling that the next Africa-France summit will be held in Nairobi, a sign of France’s pivot towards closer ties with non-francophone Africa. Nigeria and Kenya have emerged as the linchpins of this pivot.

(12) Relatedly, ECOWAS will very likely break up in 2025, exactly 50 years after its founding.

The breakup of ECOWAS — which was a colossal mistake — came to pass. Relatedly, Africa as a region needs a new model of institutionalized Pan-Africanism.

(13) In 2025 African states in the Sahel and beyond will struggle to maintain peace and security, let alone provide other essential public goods and services.

The “Sahel now accounts for half of global terror deaths.” And the spread of jihadist violence is spreading southward, fast. Notably, key players in West African capitals appear to not have learned any lessons from the Global War on Terror. The violence in the Sahel and (increasingly) coastal West African states are primarily driven by local political, economic, and social grievances (and ultimately, enabled by weak state capacity). Which is to say that states should either settle with the belligerents, or defeat them militarily. What will not work is careless internationalization of these conflicts. Of course it is fine to receive foreign assistance. However, such assistance must be packaged within domestic security agendas; and in a manner that doesn’t sap domestic agency or help terrorists’ recruitment efforts.

III: Politics and Electoralism

(14) In my view, the most important elections on the Continent this year will be held in Côte d’Ivoire and Tanzania.

Both elections failed to deliver on the promise of signaling political maturity. More broadly, the 2025 elections in Côte d’Ivoire and Tanzania raised important questions about how Africa’s ruling elites seek popular legitimacy. This is a discussion that I hope can be had with sober minds and attention to objective realities

First, African leaders must understand that there’s no getting around having to earn popular legitimacy. At the moment, the Continent has arguably the most complacent ruling elites in the world. This makes their efforts to skirt having to answer to the people they govern doubly troubling. There should simply be no room for unaccountable leadership. Second, holding elections as a box checking exercise will no longer cut it. Whether such elections yield turnovers (see Malawi) or not (see Cameroon) is immaterial. What must happen is that the chosen legitimation strategy (in this case elections) must also incentive effective performance on the part of rulers towards the material advancement of the people they govern. Otherwise, elections will increasingly serve merely as a mechanism for channeling grievances (either through high turnover or violent confrontations between citizens and their governments). And in the end, people will start wondering why they should bother.

(15) Finally, 2025 will force questions over successions in Cameroon, Congo-Brazzaville, Equatorial Guinea, and Uganda.

There was no reckoning regarding the question of leadership transition in any of these countries. The incumbents in the four countries have been in power for a combined 169 years and counting. And in all four, there’s no clear path away from continued political decay.

Happy New Year!