African enterprise is growing in a tougher setting than a headline growth rate suggests. The continent is expected to expand by about 4.2% in 2026, a solid pace, yet most workers still earn their living in informal work, a growing share of new tech capital is debt rather than equity, and basic infrastructure, above all electricity, remains the binding constraint on firms of every size (AfDB, 2026; ILO, 2026; IEA, 2025).
Key findings

• Growth is steady but uneven. The AfDB projects 4.4% for 2025 and 4.2% for 2026. East Africa leads at 5.9%; Southern Africa trails at 2.1%.
• Inflation is easing. Average inflation is forecast to fall from 13.7% in 2025 to 10.4% in 2026, which helps firms plan, though it remains high.
• Jobs lag the labour force. Sub-Saharan Africa added 15.4 million people to its labour force in 2025 but created 14.6 million jobs, and nearly nine in ten workers are in informal employment.
• Capital is shifting towards debt. African tech funding reached about $4.1bn in 2025; debt rose 63% to $1.64bn, about 40% of the total.
• Mobile money is the financial backbone. Global mobile money passed $2tn in 2025, with growth led by sub-Saharan Africa.
• Regional trade is growing. Intra-African trade reached $213.8bn in 2025, up 5.5%, but a trade finance gap of about $100bn a year holds back the AfCFTA.

The report draws on the most recent institutional data. Where sources disagree, or where a figure is dated, this is stated in the text and in Section 9.

2 The macroeconomic setting
The AfDB’s 2026 African Economic Outlook projects growth of 4.2% in 2026, easing slightly from 4.4% in 2025, with a recovery to 4.4% in 2027 (Ecofin Agency, 2026, reporting the AfDB). UNCTAD, using a different method and country grouping, is more cautious at 3.9% for 2025 and 4.0% for 2026. The two sets of figures are not directly comparable and are best read as a range.
Figure 1: Real GDP growth by African region, 2025 and 2026 (%)

Source: AfDB African Economic Outlook 2026, as reported by Ecofin Agency (2026). 2025 is an estimate and 2026 a forecast.
East Africa remains the fastest-growing region, though its pace slows from 6.6% to 5.9%. West Africa is stable at about 4.7%, North Africa slips to 4.0% and Central Africa edges up to 3.8%. Southern Africa is the weakest at 2.1%, which weighs on the continent’s largest economies and their regional supply chains.
Prices, public finances and external shocks
Indicator 2025 2026 (forecast)
Average inflation 13.7% 10.4%
Average fiscal deficit (% of GDP) Not stated in source 4.8%
Real GDP growth, Africa (AfDB) 4.4% 4.2%
Source: AfDB African Economic Outlook 2026, as reported by Ecofin Agency (2026).
Falling inflation should lower borrowing costs over time and make pricing and wage decisions easier for firms. The AfDB nevertheless warns of rising energy and fertiliser costs linked to tension in the Middle East, lower development aid, possible pressure on remittances, trade tension and climate shocks (Ecofin Agency, 2026). For small and medium-sized enterprises (SMEs), which have little cushion against input-cost shocks, these risks matter more than the headline growth rate.

3 Jobs, informality and the entrepreneurial base
Entrepreneurship in Africa is largely a story of necessity and scale. According to the ILO’s 2026 Employment and Social Trends report, the labour force in sub-Saharan Africa grew by 15.4 million in 2025, while 14.6 million jobs were created (Nairametrics, 2026, reporting the ILO). The gap is small in a single year but compounds as young people enter the market.
Measure (sub-Saharan Africa) Figure
Growth in labour force, 2025 15.4 million
Jobs created, 2025 14.6 million
Workers in informal employment Nearly 9 in 10
Workers in households below US$4.20 a day (PPP) Close to 6 in 10
Young people (15–29) completing technical and vocational training 6.5%
Young people (15–29) with no schooling or pre-primary only 21%
Source: ILO 2026 Employment and Social Trends, as reported by Nairametrics (2026).
Three implications follow. First, much of the enterprise base is made up of micro-businesses and own-account workers who lack the capital, premises or formal records needed to grow. Second, the small share of young people with technical and vocational training points to a skills gap that limits the quality of both employment and entrepreneurship. Third, because informal firms sit outside tax and regulatory systems, they are often invisible to lenders and to policy, which reinforces the finance gap described next.

4 Access to finance
Venture capital and tech funding
Partech’s 2025 Africa Tech Venture Capital report records about $4.1bn of funding, a record, across 570 deals (up 7%). Equity rose 8% to $2.41bn, while debt rose 63% to $1.64bn from 108 deals, so debt now accounts for about 40% of the total (BusinessDay, 2026, reporting Partech). Debt-only investors are now the majority of participants, and Partech describes the change as structural rather than a cyclical rebound.
Figure 2: African tech funding by instrument ($bn)

Source: Partech Africa Tech VC Report 2025, as reported by BusinessDay (2026). The 2024 values are derived from the reported year-on-year growth rates (equity +8%, debt +63%) and are approximate.
Market Pattern in 2025
Nigeria 102 deals (down 11%); equity-led, but debt was 19% of funding and grew 132%
Kenya Debt was 48% of capital deployed; half of the year’s megadeals were equity-funded
South Africa Equity was 90% of funding; debt volumes fell 45%
Egypt Equity 80% (up 21%) and debt 20% (up 73%)
Source: BusinessDay (2026), reporting Partech.
By sector, fintech remains the largest at 37% of funding, though it contracted year on year. Cleantech ranked second, with funding nearly doubling on the back of large transactions. Commerce, enterprise software and health technology each passed $200m in equity for the first time since the 2021–2022 boom. The shift towards debt suggests that lenders are financing revenue-generating businesses, such as asset-backed mobility and commerce, rather than growth at any price. It also means founders face repayment obligations in currencies that can weaken sharply.
Mobile money and everyday finance
Mobile money is the most successful financial innovation in African enterprise. GSMA reports that global mobile money exceeded $2tn in transactions in 2025, taking four years to double after taking twenty to pass the first $1tn. There are 2.3 billion registered accounts (268 million added in 2025) and 593 million accounts active in a 30-day period, up 15%. Most new registered and active accounts came from sub-Saharan Africa (TelecomTV, 2026, reporting GSMA). Trade press reports that about $1.4tn of the total flowed through sub-Saharan Africa (Connecting Africa, 2026).
The same data carry a warning: almost three-quarters of registered accounts are inactive in any month. Access to a wallet is not the same as access to credit, and merchants still need payments data, working-capital products and interoperable systems to turn wallets into growth.
The SME finance gap
Estimates of the unmet financing needs of African SMEs run into the hundreds of billions of dollars. One widely cited IFC-based estimate puts the gap at about $331bn, but it is several years old and should be treated as indicative only. The data on women entrepreneurs’ access to finance are similarly dated, drawing on 2023 surveys. Both gaps are a priority for new, up-to-date measurement.

5 Trade and the African Continental Free Trade Area
Afreximbank reports that intra-African trade reached $213.8bn in 2025, up 5.5% from $202.7bn in 2024, with Ethiopia, Uganda, the Democratic Republic of the Congo and Zambia among the contributors to growth (Arise News, 2026, reporting Afreximbank). South Africa remains the largest intra-African trader, with a 19.2% share, down from 20.8%. Côte d’Ivoire holds 4.83%.
Different sources report different totals: figures of $210bn, $213.8bn and $220bn have all been published for recent years, and the $220.3bn cited for 2024 in an earlier Afreximbank report does not match the $202.7bn used as the 2024 base in the latest one. The direction is consistent, but the exact level depends on the source and the revision.
Afreximbank estimates an annual trade finance gap of about $100bn, which it says limits the benefits of the AfCFTA, and projects that intra-African trade could double within a decade if the agreement is fully implemented. Around 50 countries have ratified the agreement; the exact count varies between sources (49 and 50 both appear), as does the number of countries live on the Pan-African Payment and Settlement System (28 to 30). For enterprises, the practical test is not ratification but whether customs procedures, rules of origin, payments and logistics work at the border.

6 The enabling environment: energy and digital infrastructure
Unreliable power is the most commonly cited constraint on African firms. The IEA reports that 730 million people worldwide lacked electricity in 2024, 11 million fewer than in 2023, and that sub-Saharan Africa accounts for about eight in every ten of them (IEA, 2025). Access is stagnating in the region because new connections barely keep pace with population growth. For businesses, this means diesel generation, higher unit costs and limited scope for cold storage, manufacturing and digital services.
Digital infrastructure partly compensates. Mobile money, mobile data and platform services have allowed many firms to reach customers without physical branches. Clean energy is also attracting capital: Partech identifies cleantech as the second-largest sector for tech funding in 2025 (BusinessDay, 2026). Distributed solar and similar solutions are therefore becoming both an enterprise opportunity and an enabler for other enterprises.

7 Risks to watch
• External shocks. Higher oil, gas and fertiliser prices could reverse the improvement in inflation and widen current account deficits (Ecofin Agency, 2026).
• Reduced aid and remittances. Lower development aid and possible pressure on migrant remittances would hit households and small firms that depend on them.
• Debt-heavy financing. A rise in dollar-linked debt exposes start-ups to currency risk and refinancing pressure.
• Trade fragmentation. Global trade tension and weak regional implementation of the AfCFTA could limit the gains from larger markets.
• Climate shocks. Droughts, floods and heat disrupt agriculture, energy and supply chains, and hit informal firms hardest.
• Power shortages. Without faster electrification, the benefits of digital and financial innovation will be unevenly shared.

8 Outlook and priorities
The medium-term outlook is moderately positive. Growth of around 4% is forecast to continue, inflation is falling and trade and digital payments are expanding. However, the benefits will reach most firms only if the constraints identified in this report are addressed. Five priorities stand out:
• Formalise gradually. Make registration, tax and licensing simple and low-cost, so that informal firms can enter lending and procurement systems.
• Deepen domestic capital. Build local-currency lending, credit guarantees and pension and insurance investment in SMEs, to reduce reliance on foreign-currency debt.
• Turn wallets into credit. Use payments data, with proper consumer protection, to underwrite working-capital loans for merchants.
• Make the AfCFTA work at the border. Prioritise customs, rules of origin, payments interoperability and trade finance.
• Close the power and skills gaps. Expand reliable energy, particularly distributed solar, and invest in technical and vocational training.

9 Data notes and limitations
• Growth figures are the AfDB’s Africa-wide estimates; the IMF and the World Bank report sub-Saharan Africa separately, so their figures differ.
• Inflation figures are averages. Median inflation is lower, because a few high-inflation economies raise the mean.
• The 2024 funding values in Figure 2 are derived from reported growth rates and are approximate.
• The SME financing gap estimate of about $331bn and the data on women entrepreneurs’ finance are dated (the latter from 2023).
• No Africa-wide Global Entrepreneurship Monitor data were available for this report, so entrepreneurial activity rates are not covered. Remittances are also outside its scope.
• Several figures were taken from press reports of institutional publications. Readers should check them against the originals before citing them formally.

References
AfDB (2026) African Economic Outlook 2026. African Development Bank. Reported in Ecofin Agency (2026).
Arise News (2026) ‘Intra-African trade rises 5.5% to $213.8bn in 2025, says Afreximbank’. Available at: https://www.arise.tv/intra-african-trade-rises-5-5-to-213-8bn-in-2025-says-afreximbank/
BusinessDay (2026) ‘Africa’s tech investors pivot to debt as funding hits $4.1bn in 2025’. Available at: https://businessday.ng/technology/article/africas-tech-investors-pivot-to-debt-as-funding-hits-4-1bn-in-2025/
Connecting Africa (2026) ‘$1.4T flowed through mobile money in sub-Saharan Africa in 2025 – GSMA’. Available at: https://www.connectingafrica.com/mobile-money/-1-4t-flowed-through-mobile-money-in-sub-saharan-africa-in-2025-gsma
Ecofin Agency (2026) ‘AfDB expects Africa’s growth to ease slightly to 4.2% in 2026’, 28 May. Available at: https://www.ecofinagency.com/news/2805-55985-afdb-expects-africa-s-growth-to-ease-slightly-to-4-2-in-2026
IEA (2025) ‘Access to electricity stagnates, leaving globally 730 million in the dark’. International Energy Agency. Available at: https://iea.org/commentaries/access-to-electricity-stagnates-leaving-globally-730-million-in-the-dark
ILO (2026) World Employment and Social Outlook: Employment and Social Trends 2026. Geneva: International Labour Organization. Reported in Nairametrics (2026).
Nairametrics (2026) ‘Sub-Saharan Africa labour force grew by 15.4 million in 2025 – ILO report’, 16 January. Available at: https://nairametrics.com/2026/01/16/sub-saharan-africa-labour-force-grew-by-15-4-million-in-2025-ilo-report/
Partech (2026) 2025 Africa Tech Venture Capital Report. Partech Partners.
TelecomTV (2026) ‘Mobile money accounted for $2tn in transactions in 2025’. Available at: https://www.telecomtv.com/content/digital-platforms-services/mobile-money-accounted-for-2tn-in-transactions-in-2025-55168/
UNCTAD (2026) Reported growth projections for Africa: 3.9% (2025), 4.0% (2026), 4.1% (2027), via Ecofin Agency (2026).