The International Monetary Fund (IMF) has projected that Sub-Saharan Africa’s economy will grow by 4.5 per cent in both 2026 and 2027.
This is in spite of the ongoing war in the Middle East and an increasingly challenging global economic environment.
Zeine Zeidane, Director of the African Department, stated this in a news briefing, on the October Regional Economic Outlook Update for Sub-Saharan Africa in Bangkok, Thailand on Thursday .
Zeidane said the 2026 growth projection represented an upward revision of 0.2 percentage points from its April forecast, reflecting the region’s economic resilience, previous reforms and businesses’ ability to adapt to global disruptions.
He, however, said that the positive growth outlook masked significant differences among countries.
Zeidane said commodity exporters were benefiting from higher oil, copper and gold prices, while non-resource-intensive economies faced slowing growth and widening external deficits.
He said that rising fuel and transport costs, alongside the prospect of more expensive fertiliser, could intensify cost-of-living pressures and threaten food security across the region.
According to him, median inflation is projected to increase from 3.4 per cent in 2025 to 4.3 per cent in 2026 and five per cent in 2027.
Zeidane attributed the region’s resilience partly to reforms undertaken before the current shock, including subsidy and exchange rate reforms in Ethiopia and Nigeria, as well as structural reforms in South Africa.
He said that the rerouting of global energy supplies, the drawing down of inventories and adjustments by businesses to their sourcing and logistics arrangements had also helped cushion the impact of external disruptions.
He said that governments had limited fiscal space to respond to further shocks, in spite of earlier fiscal adjustments that helped reduce budget deficits and debt ratios.
According to him, interest payments account for about 12 per cent of government revenue in a typical country in the region, leaving fewer resources for essential public services and investment.
“Although some countries have maintained access to international markets, borrowing costs remain high, while increased reliance on domestic banks for government financing can reduce credit available to businesses and households.
“Such borrowing can also increase the banking system’s exposure to government debt,” he said.
Zeidane said that bilateral aid to Sub-Saharan Africa would decline by another 12 per cent in 2026, following a sharp reduction in 2025.
“This leaves the region with little room to absorb another shock. Renewed disruption to energy supplies, a sharp increase in global risk aversion, or a strong El Nino can all intensify pressures.
“Conflict and insecurity remain an additional drag in parts of the region,” he said.
Zeidane said the balance of risks remained firmly tilted to the downside, in spite of the region’s demonstrated capacity to adapt to difficult circumstances.
To address the challenges, he urged policymakers to prioritise the protection of vulnerable households, the preservation of economic stability and the implementation of reforms to support long-term growth.
On social protection, Zeidane advised governments to avoid broad fuel-price relief measures, describing them as expensive and poorly targeted.
He also recommended targeted assistance, including school feeding programmes and geographically targeted support, particularly in countries with weak social protection delivery systems.
He called for any temporary fuel-price relief to be transparently funded, capped and time-bound to prevent additional pressure on public finances.
On economic stability, he advised commodity-exporting countries to save most of their windfall revenues, including through the repayment of expensive debt.
Zeidane said that monetary tightening might be necessary in many countries to prevent temporary price increases from becoming persistent inflation.
He urged governments to sustain reforms aimed at improving electricity supply, expanding digital connectivity, strengthening skills and creating a more predictable business environment to encourage private investment and job creation.
He also called for greater regional trade and electricity integration to expand markets and reduce dependence on imported fuel.
Zeidane said these reforms were particularly important because Sub-Saharan Africa continued to face a substantial productivity gap compared with other emerging and developing economies.
He said that closing even part of the gap could create significant opportunities for stronger and more inclusive economic growth.
He reaffirmed the IMF’s commitment to supporting countries across the region through financial assistance, policy advice and capacity development tailored to their individual circumstances.
“The region’s experience of difficult reforms and rapid adaptation offered grounds for confidence.
“Protecting vulnerable populations, preserving macroeconomic stability and sustaining productive investment are, however, essential to converting resilience into lasting prosperity,” he said.
