Moody’s projects Sub-Saharan Africa’s economic growth in 2025, flags Zambia’s drought

Moody’s has forecast improved economic performance for Sub-Saharan Africa in 2025, citing an average growth rate of 4.2 percent, up from 3.8 percent in 2024.

This growth is expected to be driven by investments in energy, infrastructure, and an expanding services sector, according to the latest Moody’s report

This is according to a news report by Bloomberg accessed from Mining Weekly by Zambia Monitor on Saturday.

However, the credit rating agency highlighted significant risks, including the impact of last year’s severe drought in Zambia, which disrupted hydropower and mining production, and political instability in Mozambique following contested presidential elections in 2024.

Read more:google-reportedly-generates-16-billion-in-economic-activity-across-sub-saharan-africa

South Africa and Nigeria, the region’s largest economies, were praised for reforms enhancing creditworthiness and growth prospects.

Moody’s noted that while South Africa’s recovery is gradual, with easing power outages, Nigeria is making progress in improving its foreign-exchange market.

The report also flagged fiscal consolidation as a key factor stabilizing the region’s credit fundamentals despite rising refinancing risks, global capital market access issues, and inflationary pressures.

Moody’s cautioned that a sustained appreciation of the US dollar in 2025 could increase the cost of servicing foreign-currency debt.

Strong foreign direct investment is anticipated in countries producing climate-critical commodities, such as the Democratic Republic of Congo.

Growth in Angola and the Republic of the Congo is also expected to accelerate with new oil and gas projects.

Environmental and political challenges remain significant, including elections in Ivory Coast that could fuel unrest and ongoing tensions in Mozambique.

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