Economic growth across the European Bank for Reconstruction and Development’s (EBRD) sub-Saharan African economies is forecast to slow to 4.7% in 2026 from 5.2% in 2025 as higher energy costs, trade disruption and weaker investment linked to conflict in the Middle East weigh on regional activity, according to the lender’s latest Regional Economic Prospects report.

The EBRD said growth should recover only marginally to 4.8% in 2027 as economies continue to face fiscal pressures, elevated borrowing costs and inflationary risks linked to higher fuel and freight prices.

The report said commodity production and investment would continue supporting activity in the near term, but warned that geopolitical tensions and pre-election spending pressures were compounding existing vulnerabilities across many African economies.

“Disruptions linked to the conflict in the Middle East have been met with resilience, but the outlook has nevertheless deteriorated,” the EBRD said.

Among the region’s strongest performers, Benin is forecast to expand by 7.0% in 2026 after growth of 8.1% in 2025, before easing to 6.7% in 2027.

The EBRD said Benin’s strong 2025 performance was driven by construction, agriculture, manufacturing and services, alongside the successful completion of an IMF-supported programme in early 2026.

Inflation fell into negative territory at -0.4% in March 2026 owing to lower food prices, while the fiscal deficit narrowed to 2.7% of GDP and public debt declined to 52% of GDP.

However, the bank warned that higher input costs and regional security risks could weigh on growth beyond 2026.

In Côte d’Ivoire, economic growth is projected at 6.1% in 2026 after 6.5% growth in 2025, before returning to 6.5% in 2027.

The EBRD said cocoa and rubber exports continued supporting economic activity, helping narrow the current account deficit to 0.7% of GDP. Improved tax collection also reduced the fiscal deficit to 3.0% of GDP, in line with West African Economic and Monetary Union convergence targets.

While inflation remains relatively low, the bank warned that weaker external demand and softer cocoa prices could affect the outlook.

Kenya’s economy is forecast to expand by 4.6% in both 2025 and 2026 before accelerating slightly to 4.9% in 2027.

The EBRD said construction, services and mining would continue offsetting weaker agricultural and manufacturing performance.

Inflation accelerated to 4.4% in March 2026 as higher global oil prices increased domestic costs, although the Kenyan shilling remained broadly stable.

The report highlighted persistent fiscal pressures, with public debt reaching 70% of GDP and debt repayments consuming around half of government revenues. The fiscal deficit widened to 6.1% of GDP.

The EBRD also warned that political uncertainty ahead of Kenya’s 2027 elections and delays in securing a new International Monetary Fund programme remained downside risks.

Nigeria is forecast to grow by 4.1% in 2026 after 4.0% growth in 2025, before easing slightly to 3.9% in 2027.

The report said stable oil production, continued strength in services and modest industrial growth were supporting activity. Oil production remained near 1.46mn bpd, broadly aligned with quotas set by Organization of the Petroleum Exporting Countries (OPEC).

Inflation rose to 15.4% in March 2026 after easing during much of 2025, while debt-servicing costs continued absorbing more than 70% of federal government revenues despite public debt remaining relatively moderate at 36% of GDP.

The EBRD said election-related uncertainty, inflationary pressures and higher fuel costs remained key risks for Africa’s largest economy.

In Senegal, the bank forecast economic growth slowing sharply to 2.5% in 2026 and 2.7% in 2027 following stronger expansion in 2025.

Growth reached 6.7% last year after oil production at the Sangomar field exceeded 36mn barrels, boosting hydrocarbon exports and narrowing the current account deficit from 11.5% of GDP to 5.6%.

The fiscal deficit also narrowed to 6.4% of GDP, while inflation eased to 0.8% in early 2026.

However, the EBRD said confidence in Senegal’s public finances remained affected by previously undisclosed debt liabilities, with government debt estimated at 120% of GDP at the end of 2025.

In March 2026, S&P Global Ratings downgraded Senegal’s local-currency sovereign rating, citing elevated refinancing risks and stalled IMF programme negotiations.