Sub-Saharan Africa's economic expansion is expected to slow modestly in 2026 as higher energy costs, weaker external demand and constrained fiscal space offset gains from structural reforms and improved trade access, according to the World Bank's latest Global Economic Prospects report.

The World Bank estimates that growth across Sub-Saharan Africa accelerated to 4.1% in 2025, supported by stronger-than-expected commodity prices, easing inflation and improving investor confidence. Prices for key exports including gold, copper and coffee rose sharply during the year, boosting export earnings and government revenues across a number of economies.

Improved agricultural output and currency appreciation in several countries also helped drive down food and headline inflation, allowing central banks to begin cautiously easing monetary policy after an extended period of tightening. The resulting improvement in domestic demand, combined with progress on economic reforms in several large economies, supported private investment and broader economic activity.

Middle East conflict clouds outlook

However, the World Bank expects growth to edge lower to 4.0% in 2026 before recovering to an average of 4.4% in 2027 and 2028. The 2026 forecast has been revised down by 0.3 percentage points since January, reflecting the growing impact of the conflict in the Middle East and the resulting shock to global energy markets.

While some oil-producing countries stand to benefit from higher crude prices, the region as a whole remains highly vulnerable to rising fuel costs. Most economies in Sub-Saharan Africa are net energy importers, leaving them exposed to higher transport, fertiliser and electricity costs that feed directly into inflation and weaken household purchasing power.

The World Bank said high-frequency indicators at the start of 2026 suggested that economic activity remained relatively resilient despite mounting global uncertainty. Nevertheless, preliminary data indicate that the disinflation trend that characterised much of 2025 may have stalled, with consumer price growth beginning to accelerate again in several countries as imported cost pressures intensified.

Governments struggle with rising costs

Governments have responded in different ways. Ethiopia and Ghana have expanded or temporarily maintained fuel subsidy programmes to protect households and businesses from rising costs, while Angola has delayed planned subsidy reforms. Senegal has adjusted administered prices and social transfers in an effort to cushion vulnerable groups from the impact of higher living costs.

The renewed inflationary pressures have complicated policymaking across the region. Although fiscal positions improved in many countries during 2024 and 2025, governments generally have limited resources available to absorb higher energy and food prices without increasing borrowing or widening budget deficits.

Tighter financial conditions add pressure

Financial conditions have also become more challenging. Sovereign bond yields and borrowing spreads have risen, currencies have weakened against the US dollar in several markets, and equity markets have largely stagnated as investors reassess risks associated with slower global growth and heightened geopolitical tensions.

The World Bank warned that expanding fuel subsidies could reverse recent fiscal gains if governments are unable to target support effectively. Higher borrowing costs, declining concessional financing and reductions in official development assistance are expected to place additional pressure on public finances across the region.

Trade deals and reforms offer support

Despite these challenges, several developments are expected to support growth over the medium term. The United States has extended the African Growth and Opportunity Act (AGOA) through the end of 2026, preserving preferential market access for eligible African exports. China has also eliminated tariffs on all African imports, a move that could help stimulate trade flows and improve export competitiveness.

The World Bank said the deepening implementation of the African Continental Free Trade Area (AfCFTA) should also strengthen regional integration and create new opportunities for manufacturing, logistics and value-added exports.

Structural reforms remain another important source of support. In South Africa, reforms to improve electricity availability are helping ease a longstanding constraint on economic activity. Ethiopia continues to implement monetary and financial-sector reforms, while Nigeria is pursuing exchange-rate liberalisation, public-finance reforms and measures designed to improve the business environment and attract investment.

Commodity exporters face uneven gains

Even so, growth among industrial commodity exporters is expected to remain subdued. The World Bank forecasts growth for this group at 3.2% in 2026, up only marginally from 3.1% in 2025, before averaging 3.5% in 2027-28. Weaker external demand and domestic structural constraints are expected to limit the benefits of higher commodity prices.

Regional outlook diverges

Replace the entire "Regional outlook diverges" section with the following expanded version:

Regional outlook diverges

Nigeria and South Africa, the region's two largest economies, have both seen growth forecasts revised downward. Nigeria is expected to expand by 4.1% in 2026 and 4.2% in 2027, with reforms supporting medium-term prospects but external headwinds and higher energy costs weighing on activity. South Africa's economy is forecast to grow by just 1.0% in 2026 and 1.5% in 2027, reflecting persistent constraints linked to infrastructure, logistics and investment despite improvements in electricity availability.

Among the region's oil exporters, Angola is projected to grow by 2.4% in 2026 and 2.7% in 2027, benefiting from stronger crude prices but continuing to face structural challenges. By contrast, Equatorial Guinea is expected to remain in recession, with output forecast to contract by 3.5% in 2026 and 3.4% in 2027 as hydrocarbon production continues to decline.

East Africa is expected to remain one of the continent's strongest-performing regions. Ethiopia is forecast to post growth of 8.0% in 2026 and 6.9% in 2027, supported by monetary, financial-sector and exchange-rate reforms. Tanzania is projected to expand by 6.1% in 2026 and 6.4% in 2027, while Uganda is expected to grow by 6.8% and 8.5% respectively despite a downgrade linked to delays in major oil projects. Kenya's growth is forecast at 4.4% in 2026 before accelerating to 5.0% in 2027.

West Africa presents a more mixed picture. Ghana is expected to grow by 4.8% in 2026 and 4.9% in 2027, while Côte d'Ivoire's expansion is forecast to slow to 5.8% in 2026 before recovering to 6.5% in 2027 as cocoa prices ease from recent highs. Senegal has experienced one of the sharpest forecast downgrades in the region, with growth projected at 2.2% in 2026 and 2.6% in 2027 following revelations of hidden debt and the suspension of IMF programme support. Benin is forecast to remain one of the region's strongest performers, expanding by 7.0% in 2026 and 7.2% in 2027, while Guinea is expected to record growth of 8.8% and 11.6% respectively, driven by large-scale mining investments.

Elsewhere in West Africa, Niger is projected to grow by 6.7% in 2026 and 6.4% in 2027, Mali by 5.0% and 5.2%, Togo by 5.0% and 5.8%, and Liberia by 5.0% and 5.4%. Sierra Leone is expected to expand by 4.0% in 2026 and 4.7% in 2027, while Guinea-Bissau is forecast to grow by 4.8% and 4.9%.

Southern Africa is expected to remain comparatively subdued. Zambia is forecast to expand by 4.4% in 2026 and 4.7% in 2027, while Namibia is projected to grow by 2.7% and 3.4%. Botswana is expected to recover from recent contraction, with growth reaching 2.7% in 2026 and 3.2% in 2027. Zimbabwe's economy is forecast to expand by 4.6% in 2026 before easing to 4.2% in 2027, while Lesotho is expected to grow by just 1.3% and 1.5%, among the weakest performances in the region.

Central Africa is expected to deliver mixed results. The DRC is forecast to grow by 5.2% in 2026 and 5.1% in 2027, supported by mining activity despite security challenges in the east. The Republic of Congo is projected to expand by 3.7% and 3.4%, while Gabon is expected to grow by 3.0% and 3.3%. Cameroon is forecast at 3.4% in 2026 and 3.7% in 2027, while Chad is expected to post growth of 5.2% and 5.3%. The Central African Republic is forecast to grow by 2.3% in 2026 and 3.1% in 2027.

Among fragile and conflict-affected states, the outlook remains highly volatile. Sudan is forecast to rebound by 5.5% in 2026 and 4.4% in 2027 from a low base, while South Sudan is expected to contract by 7.7% in 2026 before rebounding by 20.3% in 2027. Somalia's economy is projected to grow by 2.8% in 2026 and 3.1% in 2027, while Eritrea is forecast to expand by 3.5% and 3.6%.

Non-resource-rich economies are projected to continue outperforming commodity exporters despite a temporary slowdown. Growth is expected to ease from 6.4% in 2025 to 5.7% in 2026 before accelerating again to an average of 6.2% over 2027-28. Nevertheless, the forecasts highlight an increasingly uneven recovery across Sub-Saharan Africa, with reform-driven economies and mining exporters outperforming countries facing fiscal stress, commodity dependence, climate shocks or governance challenges.

Poverty and food insecurity remain concerns

The World Bank cautioned that the region's growth performance remains insufficient to generate meaningful reductions in poverty. Real GDP per capita is expected to expand by only 1.6% in 2026 before improving to an average of 2.0% annually in 2027-28. With population growth among the highest in the world, economic expansion continues to lag behind the pace required to create enough jobs and significantly raise living standards.

Food insecurity remains a major concern, particularly in fragile and conflict-affected states, where hunger levels are expected to remain at their highest levels since the early 2000s. Conditions are also deteriorating in some non-conflict countries as rising food prices, climate shocks and constrained public finances weigh on household welfare.

The World Bank additionally warned that declining international aid flows could exacerbate humanitarian pressures and weaken health systems across the region. The risks have been underscored by the Ebola outbreak in eastern DRC, now among the largest ever recorded globally, with imported cases also confirmed in neighbouring Uganda.

Long-term growth depends on reforms

Although Sub-Saharan Africa remains one of the world's faster-growing regions, the World Bank said sustaining stronger growth will depend on continued reforms, greater investment, improved energy security and successful management of external shocks. Without faster productivity growth and stronger private-sector job creation, the region's ability to reduce poverty and improve living standards is likely to remain constrained.