By Maxwell Awumah, GNA
Ho, May 27, GNA – Africa’s economies are projected to grow at 4.2 per cent in 2026, moderating slightly from 4.4 percent in 2025, before rebounding to 4.4 per cent in 2027, according to the 2026 African Economic Outlook (AEO).
The Outlook was released on Tuesday at the African Development Bank Group Annual Meetings in Brazzaville, Congo.
The findings, shared with Ghana News Agency (GNA) underscored the continent’s resilience despite geopolitical tensions, tighter global financial conditions, and supply chain disruptions.
Growth in 2025 was supported by improved macroeconomic management, stronger agricultural output, elevated commodity prices, and ongoing structural reforms. Africa remains one of the world’s fastest-growing regions, with 22 countries projected to grow above five percent in 2025.
Published under the theme: “Mobilizing Africa’s Development Financing at Scale in a Fragmented World”, the report stresses that sustaining faster, inclusive, and resilient growth requires mobilizing and deploying capital at scale. This includes strengthening domestic resource mobilisation, deepening financial integration, expanding capital markets, and enhancing Africa’s agency in global finance.
Mixed Regional Outlook
East Africa: Expected to remain the fastest-growing region, though growth will ease from 6.6 per cent in 2025 to 5.9 per cent in 2026, before rebounding to 6.4 per cent in 2027, as rising energy and import costs weigh on performance.
West Africa: Growth projected at 4.7 per cent in 2026, broadly in line with 4.8 per cent in 2025, supported by agriculture and infrastructure investment.
North Africa: Forecast to grow at 4.0 per cent in 2026, down from 4.4 per cent in 2025, reflecting weaker tourism demand and global supply chain disruptions.
Central Africa: Growth expected to rise slightly to 3.8 per cent in 2026, buoyed by sustained high oil prices.
Southern Africa: Growth subdued at 2.1 per cent in 2026, down from 2.3 per cent in 2025, due to weaker mining and agriculture output and higher energy costs.
Downside risks remain significant. Inflation is projected at 10.4 per cent in 2026, posing challenges to macroeconomic stability. Geopolitical tensions, supply chain disruptions, and energy price volatility could further strain fiscal balances. Exchange rate depreciation and financial market volatility may amplify debt vulnerabilities, while global fragmentation could intensify pressures on external financing flows.
Closing Africa’s Financing Gap
The report highlights Africa’s annual $1.3 trillion financing shortfall to meet the Sustainable Development Goals. The deficit stems from low domestic resource mobilisation, weak financial intermediation, and tightening external financing conditions.
Yet, with reforms, Africa could unlock up to $1.43 trillion annually through improved revenue collection, efficient public investment, tackling illicit financial flows, deeper capital markets, expanded public-private partnerships, diaspora financing, and better use of natural capital.
Key opportunities include:
$469 billion in additional annual revenues from stronger tax and non-tax mobilisation.
$299 billion in potential savings from improved public investment efficiency.
Public-private partnerships, where each dollar of public investment could attract $1.40 in private investment.
Institutional investors manage around $4 trillion in assets, but less than 2.7% is allocated to Africa’s infrastructure and productive sectors — a major untapped potential.
The report calls for accelerated efforts to strengthen Africa’s financial systems through pan-African banks, integrated capital markets, and innovative instruments such as climate and Islamic finance. A central pillar is the New African Financial Architecture for Development (NAFAD), designed to leverage over $4 trillion in assets within Africa’s financial ecosystem.
The launch of the African Credit Rating Agency in January 2026 is highlighted as a tool to address perceived biases in sovereign risk assessments. While Africa’s stock market capitalization reached $1.2 trillion in 2024 — nearly sixfold growth over two decades — activity remains concentrated in South Africa, Egypt, Nigeria, and Morocco, underscoring the need for broader market integration.
The report also emphasizes advancing continental initiatives such as the African Financing Stability Mechanism, aimed at easing liquidity pressures, strengthening financial stability, and helping countries manage debt refinancing risks at lower cost.
GNA
Edited by Benjamin Mensah
Reporter: Maxwell Awumah
[email protected]
