Research Proposal: Challenges to Sustainable Economic Growth in Africa – Structural Barriers, Policy Responses, and Pathways Forward

Abstract

This research proposal investigates the multifaceted challenges hindering sustainable economic growth in Africa from 2020 to 2025, focusing on structural barriers such as poverty, debt vulnerabilities, inflation, limited job creation, and geopolitical uncertainties, while examining the role of the African Continental Free Trade Area (AfCFTA) in mitigating these issues. Drawing on recent data from IMF, World Bank, and Afreximbank reports, the study employs a mixed-methods approach to analyze GDP trends, intra-African trade dynamics, and policy effectiveness across sub-Saharan Africa. Key objectives include assessing growth barriers, evaluating AfCFTA’s impact, and recommending strategies for resilient development. The findings will contribute to policy formulation, highlighting the need for enterprise-focused growth models, improved governance, and regional integration to unlock Africa’s potential. Keywords: economic growth, Africa, AfCFTA, debt, job creation.

1.0 Introduction/Background

Africa’s economic landscape from 2020 to 2025 has been characterized by resilient but uneven growth, with the continent navigating a series of overlapping shocks including the COVID-19 pandemic, geopolitical tensions, and commodity price volatility. Sub-Saharan Africa’s GDP growth contracted by 1.6% in 2020 but rebounded to 4.7% in 2021, stabilizing at around 3.8% in 2024, and is projected to accelerate to 4.2% in 2025, driven by recoveries in non-resource-intensive countries (International Monetary Fund, 2024). However, this growth remains below the 6–7% needed to achieve the Sustainable Development Goals by 2030, with per capita income stagnating and poverty rates hovering at 35% (World Bank, 2024a). Major trends include a slowdown in resource-intensive economies due to terms-of-trade shocks, while diversification efforts in countries like Ethiopia and Rwanda have yielded faster expansion (Afreximbank, 2025). The AfCFTA, now covering 98% of tariff lines, is poised to boost intra-African trade by 35% and add USD 450 billion to GDP by 2035, but implementation lags due to non-tariff barriers and infrastructure deficits (Brookings Institution, 2025a). This study explores these dynamics to inform strategies for overcoming barriers to inclusive growth.

2.0 Problem Statement

Africa’s economic growth has been resilient at 3.8% in 2024, projected to rise to 4.2% in 2025, yet it remains uneven and insufficient to address entrenched challenges like poverty affecting one in ten people living below USD 3.20 daily, high inflation, fiscal deficits, and debt vulnerabilities exceeding 60% of GDP in many nations (International Monetary Fund, 2024; World Bank, 2024a). Intra-African trade, at only 18.2%, is hampered by fragmented markets, non-tariff barriers, and inadequate infrastructure, limiting diversification and productivity gains (Afreximbank, 2025). The AfCFTA aims to mitigate these by reducing trade costs and boosting growth by 3.9%, but geopolitical risks, energy crises, and job shortages—requiring 18 million new positions annually—pose severe threats (Brookings Institution, 2025b). Without targeted policies to enhance governance, enterprise development, and regional integration, Africa’s potential remains unrealized, perpetuating divergence and vulnerability.

3.0 Objectives of the Study

1. To examine the major structural and external challenges impeding economic growth in Africa from 2020 to 2025.
2. To analyze the role and impact of the AfCFTA in addressing these challenges and fostering intra-African trade.
3. To propose policy recommendations for overcoming barriers and achieving sustainable, inclusive growth.

4.0 Research Questions

1. What are the key structural barriers (e.g., debt, inflation, job deficits) and external shocks affecting Africa’s economic growth from 2020 to 2025?
2. How has the AfCFTA influenced intra-African trade and mitigated growth challenges?
3. What policy measures can African governments and institutions implement to enhance resilience and accelerate development?

5.0 Significance of the Study

This study provides critical insights into Africa’s growth challenges, informing policymakers, international organizations like the IMF and World Bank, and regional bodies such as the AU to refine strategies for inclusive development. By evaluating AfCFTA’s role, it contributes to academic literature on regional integration and offers practical recommendations for sustainable growth.

6.0 Literature Review

Africa’s economic growth slowed from 4.1% in 2019 to -1.6% in 2020 due to COVID-19, rebounding to 4.7% in 2021 but facing headwinds from inflation (reaching 20% in some countries) and debt crises (International Monetary Fund, 2024). Barriers include limited diversification, with commodities dominating exports, and job shortages amid a youth bulge (Afreximbank, 2025). The AfCFTA has boosted trade by 3.2% annually but struggles with infrastructure gaps (Brookings Institution, 2025c). Gaps in literature include understudied geopolitical impacts and AfCFTA’s role in resilience.

7.0 Theoretical Framework

New Institutional Economics (North, 1990) explains growth challenges through weak institutions, while Endogenous Growth Theory (Romer, 1990) emphasizes human capital and innovation deficits.

8.0 Methodology

Mixed-methods design: secondary data analysis of GDP, trade, and debt indicators from IMF/World Bank databases (2020–2025), supplemented by qualitative interviews with 20 policymakers and experts. Quantitative tools: regression analysis; qualitative: thematic coding with NVivo. Population: African economies; sample: 10 case countries.

9.0 Timeline

• Months 1–3: Literature review & data collection
• Months 4–6: Analysis
• Months 7–8: Writing & revisions
• Month 9: Defense/submission

10.0 Budget

• Data access & software: USD 500
• Travel/interviews: USD 1,000
• Printing/misc: USD 300
• Total: USD 1,800

11.0 References

African Export-Import Bank. (2025). African trade report 2025. https://media.afreximbank.com/afrexim/African-Trade-Report_2025.pdf

Brookings Institution. (2025a). Intra-African trade and its potential. https://www.brookings.edu/articles/intra-african-trade-and-its-potential-to-accelerate-progress-toward-the-sdgs/

Brookings Institution. (2025b). The future of African trade in the AfCFTA era. https://www.brookings.edu/articles/the-future-of-african-trade-in-the-afcfta-era/

Brookings Institution. (2025c). The African Continental Free Trade Area is a game changer. https://www.brookings.edu/articles/the-african-continental-free-trade-area-is-game-changer-for-both-african-and-global-economies/

International Monetary Fund. (2024). Regional economic outlook for Sub-Saharan Africa, October 2024. https://www.imf.org/en/Publications/REO/SSA/Issues/2024/10/25/regional-economic-outlook-for-sub-saharan-africa-october-2024

World Bank. (2024a). Africa pulse. https://www.worldbank.org/en/publication/africa-pulse

World Bank. (2024b). Global economic prospects. https://www.worldbank.org/en/publication/global-economic-prospects