Staff Writer
Sub-Saharan Africa’s economy is projected to grow by 4.5% in both 2026 and 2027, but rising inflation, expensive borrowing and declining foreign aid are clouding the region’s economic outlook, according to the International Monetary Fund (IMF).
In its October 2026 regional outlook, the IMF said economic growth remained resilient despite disruptions caused by the war in the Middle East, supported by adjustments in global supply chains, favourable commodity export receipts and reforms implemented by several countries.
The projected growth rate for 2026 is 0.2 percentage points higher than the IMF’s April forecast, while the 2027 outlook remains broadly unchanged. Growth is expected to match the 4.5% recorded in 2025.
However, the regional performance masks differences between economies. Growth in oil-exporting countries is projected to increase from 4% to 4.1% in 2026, while other resource-intensive economies are expected to grow by 3.8%.
Non-resource-intensive economies are forecast to slow from 6.4% growth to 6.0%.
The IMF said supply disruptions had increased pressure on energy, transport, food and agricultural input costs. Median inflation is projected to rise from 3.4% in 2025 to 4.3% in 2026 and 5.0% in 2027.
Oil prices are forecast to average US$96 a barrel in 2026 before declining to US$87 in 2027. Fertiliser prices are projected to increase by 26% this year compared with 2025, adding to pressure on food-importing economies.
The report said higher input costs could weaken agricultural production, particularly in countries facing currency depreciation, limited credit and reduced capacity to substitute expensive inputs.
Public finances have improved following fiscal adjustments and debt restructuring. The median fiscal deficit narrowed from 4.6% of gross domestic product (GDP) in 2020 to 3.1% in 2025, while median public debt declined from 56.3% of GDP in 2024 to 53.0% in 2025.
However, the median fiscal deficit is projected to widen to 3.3% of GDP in 2026.
The IMF warned that high interest payments, limited foreign reserves in some countries and declining aid leave governments with little room to respond to further economic shocks.
Bilateral aid to the region, which fell by about one-quarter in 2025, is projected to decline by another 12% in 2026.
The IMF urged governments to maintain fiscal discipline, save temporary commodity windfalls, target assistance at vulnerable households and protect productive investment.
It also warned that renewed energy disruptions, higher sovereign borrowing costs, further aid reductions and severe weather, particularly El Niño, could weaken growth and living standards.
