Sub-Saharan Africa growth outlook dims as shocks persist, World Bank says

Sub-Saharan Africa’s economic recovery from a decade of global shocks is showing signs of stalling, with growth projections for 2026 revised downward, the World Bank Group said in its latest regional report.

The April edition of the Africa Economic Update trimmed the region’s 2026 growth forecast by 0.3 percentage points from estimates published in October 2025, citing rising geopolitical risks, high debt burdens and persistent structural constraints.

Growth is now projected to hold at 4.1 percent in 2026, unchanged from 2025, but risks are tilted to the downside as inflationary pressures and tighter global financial conditions weigh on economic activity.

The report flagged the ongoing conflict in the Middle East as a key driver of rising fuel, food and fertiliser prices, which are expected to push inflation higher and disproportionately affect poorer households.

“In the short term, governments should target scarce resources to protect the most vulnerable households,” said Andrew Dabalen, World Bank Group Chief Economist for the Africa Region.

“Maintaining macroeconomic stability—by controlling inflation and exercising prudent fiscal management—will be essential to navigate the current shock,” Dabalen said.

Public debt remains a major constraint across the region, limiting governments’ ability to finance development and invest in infrastructure. According to the report, public capital investment levels are still about 20 percent below their 2014 peak.

Debt servicing pressures have also intensified, with the ratio of external public debt service to revenue doubling from nine percent in 2017 to 18 percent in 2025, squeezing fiscal space further.

Inflation is projected to rise to 4.8 percent of in 2026, driven largely by external shocks, while declining development assistance and tighter financing conditions are adding strain on low-income economies.

The report warned that with more than 620 million people expected to enter Africa’s labour force by 2050, countries must urgently shift toward more productive, diversified and private sector-led growth to create jobs.

A special focus of the update highlights industrial policy as a potential tool to boost economic transformation, particularly in sectors such as critical minerals and pharmaceuticals.

However, the World Bank cautioned that such policies must be carefully designed and sparingly used, supported by strong institutions, infrastructure, and access to finance to avoid creating isolated and inefficient industries.

It added that deeper regional integration, including through the African Continental Free Trade Area, would be critical to expanding markets and enhancing competitiveness.

“Without strong implementation and clear benchmarks, industrial policy risks creating ineffective enclaves rather than broad-based transformation,” the report said.

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