Why Africa is The Next Big Thing?

Across every corporate base, the attention towards Africa is growing. Even though Africa is an extremely diverse region made of higher, middle, and lower-income countries, its Real GDP growth rate is greater than the global average. Technology adoption in Africa is accelerating, investment is increasing and various trends/insights have projected Africa as the fastest-growing region in the world. Keying into the African economy is one way to be relevant in the future.

To better understand the trend, we provided a comprehensive overview of Africa's economy in this article and shed light on the continent's growth prospects, technological innovation, youthful population, and strategic investments in promising sectors.

Outline

Economic Pace and Growth Projections

- Comparative Growth Rates

- Regional Economic Outlook According to the 2025 ADB Report

Africa's Demographic Advantages

Technological Revolution in Africa

Investment Surge in Africa

Promising Sectors

- Agriculture

- Africa's Solid Mineral

- Stock Market

Data Centers/Digital Infrastructure

Renewable Energy

Challenges Facing Africa

- Political Instability

- Digital Divide

- Aging Grid Infrastructure

- Data Protection Laws

Conclusion

Findings from the latest ADB macroeconomic performance outlook have revealed Africa to be that rising continent. The report presented Africa's real GDP growth as projected to move from 3.2 to 4.1% in 2025, which is 0.9% and higher than the global average of 3.2%.

The International Monetary Fund (IMF) also offers similar projections that estimate African economies to reach an average Real GDP growth rate of 4.2% in 2025 and 4.3% by 2026.

In this report,12 African countries are forecasted to be among the world's 20 fastest-growing countries in 2025, with the remaining 8 being Asian countries. These countries include:

South Sudan: 27.2%

Libya: 13.7%

Senegal: 9.3%

Sudan: 8.3%

Uganda: 7.5%

Niger: 7.3%

Zambia: 6.6%

Benin: 6.5%

Ethiopia: 6.5%

Rwanda: 6.5%

Côte d'Ivoire: 6.4%

Djibouti: 6.0%

South Sudan's exponential growth is primarily owed to its post-conflict recovery.

East Africa

The Real GDP growth rate is projected to increase from 4.4% in 2024 to 5.3% in 2025 and then to 6.1% in 2026.

East African countries (South Sudan, Rwanda, Uganda, Ethiopia, Tanzania, and Kenya) are expected to grow by 5% or higher in 2025. The strong performance of South Sudan is due to its economic recovery from a prolonged conflict stemming from the signing of the peace accord among different parties.

North Africa

Real GDP growth rate for Libya, Egypt, and Morocco is projected to increase, from 2.7% in 2024 to 3.9% and 4.2% in 2025 and 2026, respectively.

Southern Africa

Real GDP growth for this region was expected to increase from 1.8% (in 2024) to 3% in 2025 and 3.1% in 2026. The growth of this region can be attributed to the performances of Eswatini, Zambia, and Zimbabwe. Except for South Africa, Namibia, and Lesotho, other economies in the region are also projected to post growth ranging from 3% to 4% in 2025.

West Africa

Real GDP is projected to grow from 4.1% (in 2024) to an average of 4.5% in 2025-2026. With the exception of Ghana, Sierra Leone, and Nigeria, all countries within the region are expected to grow by 5% or higher in 2025. In Nigeria, the region's largest economy, growth is expected to remain slow because of the impact of macroeconomic stabilization programs on household consumption and business activity.

Africa has a large youth population; the 15–24 year olds are at 200 million and projected to hit 400 million in 2045. There is availability of numerous natural resources and vast underutilized arable land. We know Africa as the place with an ancient and noble history where human life began but today it is also a place that is becoming home to more children than any other place on earth. Already, 77% of the population is below the age of 35.

The Tech sector in Africa has experienced significant growth since 2010. According to BCG, the past five(5) years have seen a 47% increase in internet activities and a growth ten times in the past 12 years. It is estimated that the Internet economy will reach $712 billion by 2050.

Also, a PwC study shows that AI in Africa could contribute $15.7 trillion to global GDP by 2030, and nearly $1.5 trillion for Africa. Key sectors such as health, agriculture, finance, or education will readily adopt AI-based innovations

Presently, there are over 600 active tech hubs across Africa, all fostering growth and adoption. The largest digital activities are in Egypt, Kenya, Nigeria, and South Africa, with Ghana, Morocco, and Tunisia following closely.

Two years after the Covid-19 outbreak, Africa made a strong comeback in the investment space in 2022. According to ZAWYA, Foreign Direct Investment(FDI) increased by 64%. The average FDI grew from 3.5 mega projects per year between 2013 and 2021 to 19 mega investments in 2022. Egypt attracted more than $96.8 billion the same year in such projects, ranking Egypt second only to the US.

The Stears Private Capital in Africa Report for Q3 2024 has revealed that the 'Big 5' are Nigeria, South Africa, Kenya, Ghana, and Egypt. These countries accounted for 85% of all private investments in Q3 2024. According to this report, 73 private market deals were recorded in the third quarter of 2024, including 39 deals with a combined disclosed value of $2.27 billion.

Over the past few years, private equity and venture capital investments have been on the rise in Africa, especially in areas such as real estate, tech, infrastructure, hospitality, healthcare, renewable energy, and consumer goods.

Additionally, many well-meaning Africans are becoming more socially minded and willing to give back by investing in society.

Africa has 65% of the world's remaining uncultivated fertile land. The latest report from the World Bank data has revealed that about 16.9% of sub-Saharan Africa's GDP comes from Agriculture, forestry, and fishing. However, it ranges from 1.6 in Botswana to 47.8 in Niger.

As of 2022, Statista presented Sudan as having the largest agricultural land area in Africa estimated to be 112.7m hectares, followed by South Africa (96.3m) and Nigeria(69.8m)

Africa is blessed with gold, silver, cobalt, uranium, copper, and many others well sought after minerals. 42 out of 54 African countries are classified as mineral resource-dependent.

In 2019, the mining and extraction sector contributed over one-third of exports from at least 60% of African countries. Nigeria plans to attract private investment and boost the mining sector by offering investors at least a 75% stake in a proposed state-owned solid minerals

Countries such as Egypt, Kenya, Morocco, Nigeria, and South Africa are beginning to attract data center investment. For example, the U.S. International Development Finance Corporation (DFC) invested $300 million and the International Finance Corporation (IFC) invested $250 million in Africa Data Centres, which is part of Lagos-based Liquid Intelligent Technologies Group and is the region's first and largest network of data facilities.

Additionally, California-based digital infrastructure firm Equinix recently announced plans to invest $390 million in South Africa.

Renewable energy in Africa is still latent. Technology companies seeking clean energy can find unexploited solar, wind, and geothermal sources across the continent. Uganda's grid is 99% powered by renewables, while grids in Kenya and Ethiopia are 90% renewables-based. Microsoft's partnership with KenGen will use geothermal energy for their new data center.

Digital Divide is the internet penetration gap that exists between and within economies. It is influenced by factors like literacy rate, affordability and quality of internet services.
According to Statista 2025, Southern Africa was the region with the highest internet penetration rate in Africa, at around 77%; Northern Africa had a penetration rate of 73%

Still, compared to developed Economies like Europe, Africa lags. As of 2023, The International Telecommunication Union (ITU) reported that internet penetration in Africa was about 39% against 87% and 91% in Europe and America respectively.

One major issue that stands out is the outdated and poorly maintained grid infrastructure. This has led to frequent power outages, especially in Western Africa, and can cause problems for refineries especially when their source of power fails.

Makhtar Diop, managing director of the International Finance Corporation (IFC), and one of the speakers at the regional energy summit in Tanzania noted that “a lot of the power outages in Africa are not linked often to production – they are often linked to distribution because the network is not robust enough”

However, the progress of some countries like Uganda proves that grid improvement is achievable.

Only 39 out of 55 African nations have implemented data protection laws as of 2024. Countries like Ethiopia and Malawi have recently enacted comprehensive legislation, while others like Namibia, Gambia, Libya, Sierra Leone, and South Sudan, are in the process of drafting their regulations.

However, the real challenge is in enforcing these laws. Only 34 of 39 countries with data protection laws have established Data Protection Authorities (DPAs). These are bodies that guide and regulate the compliance of data protection. Their effectiveness is highly affected by the resources and political policies of a country.

In 2025 there is no reason why Africa should not be lit up with the power it needs to industrialize…”, said Akinwumi Adesina, President of the African Development Bank. The African economy is indeed promising with underutilized resources, a booming population, and tech being integrated speedily. Africa presents an economic opportunity on par with Asia’

With visionary leadership and strategic partnerships, Africa will experience enormous development and investment opportunities.