Extreme Poverty Levels are Rising in Africa: UN Report

Tight fiscal space, currency depreciation, and youth unemployment remain challenges across Sub-Saharan Africa(SSA) according to the 2025 UN World Economic Situation and Prospects report. As population growth across the continent outpaces the overall reduction in the poverty headcount rate, the number of people living in extreme poverty has continued to rise. Even though the extreme poverty rate in sub-Saharan Africa has decreased over the past few decades, this decline has been significantly slower than that recorded in other regions. Moreover, new estimates reveal, a reversing trend with poverty rates increasing in the region.

Ethiopia’s real GDP is expected to grow by 6.4% in the report which is two points shy of Prime Abiy Ahmed’s (PhD) estimate for the 2024/25 fiscal year. An economic growth rate that is nearly double the estimated continental average of 3.4%. However, inflation is expected to continue cooling in Ethiopia to around 18% which would be the sixth highest in the continent by the end of the year.

The Report presented at the UN Economic Commission for Africa offices last week outlines lingering debt sustainability risks, balance of payments constraints, and a shrinking fiscal space across the continent. External debt stocks have reached historic highs with interest payments accounting for nearly a quarter of government revenues in several African economies. Ethiopia which became the third African country in as many years to default on its debt back in December of 2023 has been reported to be on track for an agreement towards debt treatment under the Common Framework of G20 creditors and the Paris Club. The country’s total external debt was reported at around 28.8 billion dollars at the end of the last fiscal year while its total debt stock amounted to 34% of GDP.

As tight fiscal spaces squeezed African countries, a wave of tightened monetary and fiscal responses by governments also triggered social tensions across the continent. A proposed financed bill sparked protests in Kenya as they entailed increased taxes while Nigerians opposed in mass the removal of expensive fuel subsidies. Ethiopia has also been implementing austere policies since August of 2023, marked by a pause on new capital projects, removal of energy subsidies, and cutbacks on central bank lending to the government. 

Amid the global slowdown in economic growth, a high proportion of youth Not in Employment, Education, or Training (NEET) is also highlighted in the Report. In sub-Saharan Africa, about three-quarters of youth employment is considered insecure, with many young people engaged in self-employment or unpaid family work. 

Mining of critical rare earth minerals is increasingly becoming a burgeoning economic sector capable of creating mass employment in Africa. Between 2019 and 2022, the global mining workforce for critical minerals, especially in copper and cobalt operations, expanded by an average of 8%. In twelve developing economies, mining accounts for 56% or more of the total exports and, in some cases, exceeds 80%. However, local communities in Africa, which contribute the largest amount to the global supply, continue to receive a dismal proportion of the benefits. A resource curse of sorts has afflicted countries like the Democratic Republic of Congo which supplies nearly three-quarters of the world’s cobalt with hundreds of thousands mining in slavery-like conditions.