WORLD BANK
Sub-Saharan Africa’s economic growth is projected to rise from 4.1 per cent in 2025 to 4.3 per cent in 2026 .
This represents 0.3 percentage points higher than the April 2026 forecast, the World Bank has said.
The projection is contained in the latest edition of the Africa Economic Update, the World Bank Group’s biannual economic report on the region.
The report said the region’s economy remained resilient in spite of geopolitical tensions, climate shocks, declining development assistance and persistent fiscal pressures.
It attributed the improved outlook to stronger macroeconomic resilience, increased domestic demand and investments associated with the global energy transition and digital technologies.
According to the report, growth forecasts have been upgraded for nearly three-quarters of countries in the region, including Angola, Ethiopia, Nigeria and Zambia.
The report, however, said that growth remained insufficient to substantially reduce extreme poverty or generate enough jobs for the region’s expanding working-age population.
It identified conflict in the Middle East, uncertainty over trade policies, tighter financial conditions, natural disasters, disease outbreaks and insecurity as factors that continue to affect economic activity across several countries.
Meanwhile, Andrew Dabalen, World Bank Chief Economist for the Africa Region said in spite of a challenging global environment, economic activity in Sub-Saharan Africa continues to demonstrate remarkable resilience.
Dabalen said that growth forecasts had been upgraded for nearly three-quarters of countries in the region, including Angola, Ethiopia, Nigeria, and Zambia.
“These gains reflect years of reforms and improved economic management.
The next challenge is turning growth into more jobs and better opportunities,” he said.
Dabalen said African countries could unlock productivity gains, promote innovation and accelerate structural transformation by investing in the foundations of an artificial intelligence-ready economy.
He said such investments would be critical to raising living standards and reducing poverty.
The World Bank also projected that the median inflation rate in Sub-Saharan Africa would increase from 3.7 per cent in 2025 to 5.5 per cent in 2026.
It attributed the expected increase to higher global prices for fuel, fertiliser and food, which could reverse some of the gains made in reducing inflation.
The report said public debt had broadly stabilised at about 57 per cent of Gross Domestic Product (GDP), adding that high debt-service costs continues to limit government spending on health, education and infrastructure.
It said that declining development assistance was increasing pressure on countries to mobilise domestic resources, deepen local capital markets and secure more sustainable sources of financing.
The bank warned that risks to the economic outlook remained tilted to the downside.
It said further geopolitical tensions could trigger additional increases in commodity prices, intensify inflation and weaken external and fiscal balances.
It said that climate-related shocks, including the possible effects of an El Niño event, could also disrupt agricultural production and worsen food insecurity, while tighter financing conditions could further reduce fiscal space.
According to the report, this edition’s special focus examines how artificial Intelligence can raise productivity, improve services and create jobs.
It said most African countries were still at an early stage of AI adoption, with activity concentrated in a few economies, notably Kenya, Nigeria and South Africa.
According to the report, the region’s biggest opportunity lies in affordable and locally adapted small AI applications rather than frontier AI systems.
It said low-bandwidth AI tools could be deployed in areas such as education, agriculture, healthcare, finance, logistics and public administration.
The report said that realising the benefits of AI would require investments in reliable electricity, affordable internet connectivity, digital skills, quality data and computing infrastructure.
It also called for effective governance, stronger institutions, technical capacity and improved implementation to support the responsible deployment of AI across the region.
The report said regional cooperation, including through the African Union’s Continental AI Strategy and the African Continental Free Trade Area, could help countries scale AI-enabled solutions and support the creation of more and better jobs.
