Economic growth in Africa is expected to reach four per cent in 2026 and 4.1 per cent in 2027.
This is a significant growth compared to 3.5 and 3.9 per cent posted in 2024 and 2025, respectively, according to the World Economic Situation and Prospects 2026 by the United Nations.
The acceleration reflects stronger macroeconomic stability in several major economies.
However, high debt servicing costs, limited fiscal space and food inflation continue to weigh on the prospects for inclusive and sustainable development, the report stresses.
It also highlights trade tensions, global uncertainty and challenges related to AGOA (African Growth and Opportunity Act) and the implementation of the African Continental Free Trade Area (AfCFTA).
The report suggests that African growth will remain resilient, despite headwinds such as declining official development assistance, rising trade barriers and an uncertain global trade and financial environment.
Even so, performance will vary across sub-regions, with East Africa expected to record the highest growth, at 5.8 per cent in 2026 compared to 5.4 per cent in 2025, driven by the performance of Ethiopia and Kenya and supported by regional integration and the expansion of renewable energy.
North Africa is expected to slow slightly to 4.1 per cent in 2026 after 4.3 per cent in 2025, while West Africa is set to slow to 4.4 per cent in 2026 after 4.6 per cent in 2025.
Central Africa, on the other hand, is projected to expand by three per cent this year compared to 2.8 per cent last year, while Southern Africa is poised to expand by two per cent, up from 1.6 per cent in 2025.
The report estimates that Africa’s average public debt-to-GDP ratio will reach 63 percent in 2025, with interest payments absorbing nearly 15 percent of public revenue.
It notes that a few countries have regained access to international markets through new bond issues.
At the same time, around 40 per cent of African countries remain in a situation of over-indebtedness or are at high risk of becoming so, and several are seeking to restructure under the G20’s common framework.
The report also highlights that limited fiscal space continues to constrain development spending, even as reform and consolidation efforts are progressing in some of the larger economies.
Furthermore, the report shows that African trade grew in 2025, supported by significant exports of precious metals and agricultural products, as well as increased imports of transport equipment.
According to the United Nations, the region’s exposure to global trade tensions remains limited, thanks to the diversification of export partnerships and exemptions from higher US tariffs on key products such as crude oil and gold.
However, the expiry of the African Growth and Opportunity Act (AGOA) and the introduction of new tariff measures pose challenges for some exporters, particularly in the clothing sector, while progress in implementing the African Continental Free Trade Area (AfCFTA) has been slow and uneven, the report indicates.
Globally, the report forecasts global growth of 2.7 per cent in 2026, slightly below the 2.8 per cent estimated for 2025 and well below the pre-pandemic average of 3.2 per cent.
To navigate a period of trade readjustments, persistent price pressures and climate shocks, the UN calls for strengthened global coordination and collective action, against a backdrop of intensifying geopolitical tensions and weakening momentum for multilateral solutions.
It stresses the importance of restoring confidence, enhancing predictability and renewing commitment to an open, rules-based multilateral trading system.
(The Star)
