World Bank report shows SA still underperforming the rest of Africa

The World Bank’s April 2025 Africa’s Pulse report projects a tepid recovery for South Africa’s economy, with GDP growth expected to rise from a feeble 0.6% in 2024 to an average of 1.8% annually from 2025 to 2027. This modest uptick, while an improvement, underscores persistent structural weaknesses in the country’s economic framework. South Africa, alongside Angola and Nigeria, is identified as a significant drag on sub-Saharan Africa’s broader growth trajectory. Excluding these three underperforming giants, the rest of the region is forecast to achieve a more robust 4.6% growth in 2025, accelerating to 5.7% in 2026 and 2027. The report paints a sobering picture of South Africa’s economic stagnation, with global uncertainties further clouding the outlook.

South Africa’s projected growth, though marginally better than the near-stagnation of 2024, remains lacklustre. The 0.6% growth rate for 2024 reflects a year hampered by chronic issues, including electricity shortages and logistical bottlenecks, which have long plagued the economy. The anticipated average of 1.8% growth over 2025–2027 suggests some relief, potentially driven by improvements in power supply, as noted in a World Bank overview from April 2025. However, this pace is insufficient to address deep-seated challenges such as high unemployment, inequality, and poverty, which continue to erode social and economic stability. The report’s figures align with a broader narrative of a country struggling to regain momentum after years of underperformance.

Regionally, South Africa’s sluggish growth contrasts sharply with the more dynamic prospects of other sub-Saharan economies. The World Bank highlights that the exclusion of South Africa, Nigeria, and Angola from regional calculations reveals a far stronger growth profile for the continent, with smaller economies driving the 4.6% and 5.7% projections for 2025 and 2026–27, respectively. This disparity underscores South Africa’s diminishing role as a regional economic powerhouse. The report implicitly points to structural constraints—such as inefficiencies in state-owned enterprises and inadequate infrastructure—as key factors holding back Pretoria’s contribution to continental growth.

Global risks loom large over South Africa’s outlook. The World Bank warns of “heightened uncertainty” stemming from potential shifts in trade policies, particularly those that could fragment global markets. South Africa, heavily reliant on commodity exports, is vulnerable to reduced demand from key trading partners, a risk compounded by the prospect of monetary tightening in major economies to counter tariff-induced inflation. Such tightening could restrict South Africa’s access to global financial markets, raising borrowing costs and squeezing fiscal space. The report also notes the potential loss of official development assistance, which could further strain public finances. These external pressures, combined with domestic frailties, tilt the balance of risks firmly to the downside.

The International Monetary Fund’s recent downgrade of South Africa’s 2025 growth forecast to 1% from 1.5%, cited in the report’s context, reflects similar concerns about trade and geopolitical disruptions. While not a direct World Bank projection, this adjustment reinforces the precarious external environment facing South Africa. The Africa’s Pulse report does not delve into country-specific trade impacts but suggests that indirect effects—such as weaker global demand and prolonged policy uncertainty—could prove more damaging than direct trade barriers.

In response to these challenges, the World Bank advocates for market liberalisation and deeper regional integration, particularly through the African Continental Free Trade Area, to bolster economic resilience. For South Africa, such measures could diversify export markets and reduce dependence on volatile global commodity cycles. Yet, the report offers no illusions about the scale of the task. South Africa’s recovery, while underway, is fragile and inadequate to restore its economic stature or significantly alleviate poverty. As global headwinds intensify, the country faces a narrow path to sustained growth, with little margin for policy missteps.