Africa’s Economic Growth To Slow To 4.2% By Year-end – AfDB

Africa’s economic growth has been predicted to slow slightly to 4.2 per cent in 2026 before returning to 4.4 per cent in 2027, matching the level recorded in 2025.

This is according to the African Development Bank (AfDB) .

The forecasts which appeared in the 2026 edition of the African Economic Outlook report ways presented during its annual meetings in Brazzaville.

According to the AfDB, the expected slowdown in 2026 mainly reflects the impact of the conflict in the Middle East on the global economy.

“The impact of this shock on growth and macroeconomic stability will depend on the duration of the supply chain disruptions and their effects on global energy and fertiliser prices,” the report said.

East Africa is expected to remain the continent’s fastest-growing region, despite a slowdown from 6.6 per cent in 2025 to 5.9 per cent in 2026. The AfDB links the weaker pace to logistics disruptions and higher energy costs.

West Africa should maintain relatively stable growth around 4.7 per cent, supported by agriculture, infrastructure investment and continued expansion in the mining and oil sectors. In North Africa, growth is expected to slow to per cent in 2026 as higher energy costs and weaker tourist arrivals from Gulf countries affect economic activity.

Central Africa’s economy should grow by 3.8 per cent in 2026, mainly supported by sustained commodity prices, especially oil. Southern Africa is expected to remain the continent’s weakest-performing region, with growth limited to 2.1 per cent because of supply chain disruptions and the broader economic effects of the Middle East conflict.

The AfDB expects average inflation across Africa to reach 10.4 per cent in 2026, driven mainly by higher global oil and gas prices. Even so, that level would remain below the 13.7 per cent recorded in 2025.

The continent’s average fiscal deficit should narrow slightly to 4.8 per cent of GDP in 2026. The report also points to temporary stabilization in external balances, but warns that rising energy and fertilizer prices could widen current account deficits again. The institution also highlighted risks linked to lower development aid and possible pressure on migrant remittances.

The AfDB said African economies continue to face a difficult international environment marked by rising trade tensions, climate shocks, lower foreign investment, geopolitical fragmentation and the lingering effects of the COVID-19 pandemic.

The institution also cited the uncertain consequences of the conflict in the Middle East, which continue to affect global markets and supply chains. To help economies absorb external shocks, the AfDB called on governments to strengthen coordination between monetary and fiscal policy, improve social support measures and avoid broad fuel subsidies.

“African central banks need to implement prudent monetary and exchange rate policies tailored to anchor long-term inflation expectations,” the institution said.

The bank added that central banks and finance ministries should act quickly to limit second-round effects linked to rising food and energy prices. The AfDB also urged countries to accelerate investment in renewable energy, regional infrastructure and industrial transformation in order to reduce dependence on imports. The institution called for deeper implementation of the African Continental Free Trade Area (AfCFTA), broader tax bases and stronger African financial systems.

The Bank stressed the need for greater economic sovereignty through stronger domestic resource mobilization, the development of African financial institutions and deeper regional integration. The AfDB’s forecasts broadly match projections published earlier this year by the United Nations Conference on Trade and Development (UNCTAD), which expects Africa’s economy to grow by per cent in 2026 and 4.1 per cent in 2027, compared with 3.9 per cent in 2025.

According to UNCTAD, the improvement should come from stronger macroeconomic stability, higher investment levels and firmer domestic demand.