- The continent recorded a projected average GDP growth of 4.4 percent in 2025, with 22 economies recording rates above 5 percent.
- Despite rising geopolitical tensions and global supply shocks, Africa's growth rate is projected to be 4.2 percent in 2026.
- Buoyed by sustained high oil prices, Central Africa's growth rate is expected to rise from 3.6 percent in 2025 to 3.8 percent in 2026.
Africa's economy is projected to grow at 4.2 percent in 2026, before slowing slightly to 4.4 percent in 2025 and rising to 4.4 percent in 2027. The findings of the 2026 African Economic Outlook were released on Tuesday at the African Development Bank Group's annual meeting in Brazzaville.www.AfDB.org), underscoring the continent's continued resilience in the face of geopolitical tensions, tight global financial conditions and supply chain disruptions.
According to the Bank's flagship report, Africa's growth to 2025 was supported by better macroeconomic management, stronger agricultural production, higher commodity prices and ongoing structural reforms. The continent remains one of the fastest growing regions in the world, with 22 countries projected to have growth rates above 5 percent in 2025.
The report, published under the theme Mobilizing Africa's development financing at scale in a fragmented world, says sustaining faster, inclusive and more resilient growth will require a decisive shift in how capital is mobilized and deployed at scale. This includes strengthening domestic resource mobilization, deepening and integrating financial systems, expanding capital markets, and enhancing African agency in global finance.
Mixed regional outlook
- East Africa is expected to remain the continent's fastest-growing region, although growth is projected to decline from 6.6 percent in 2025 to 5.9 percent in 2026, as rising energy and import costs associated with Middle East disruptions weigh on the economy. It is estimated to grow by 6.4 percent in 2027.
- West Africa is projected to remain relatively stable, with growth forecast at 4.7 percent in 2026, roughly in line with the 4.8 percent projected for 2025, supported by strong agricultural production and continued infrastructure investment.
- North Africa is expected to grow by 4.0 percent in 2026 compared to 4.4 percent in 2025, reflecting weak tourism demand from the Gulf states and the broader effects of global supply chain disruptions.
- Central Africa is one of the few regions projected to see growth, with growth rates rising modestly from 3.6 percent in 2025 to 3.8 percent in 2026 due to continued high oil prices.
- Growth in Southern Africa is expected to slow from 2.3 percent in 2025 to 2.1 percent in 2026 due to weak mining and agricultural production and higher energy costs.
Downside risks to the outlook remain significant. Inflation is projected to remain high at 10.4 percent in 2026, posing continued challenges to macroeconomic stability and growth prospects. Prolonged global supply chain and energy disruptions, as well as persistent geopolitical tensions, could further impact fiscal and external balances through higher energy and fertilizer prices. Furthermore, financial market instability and exchange rate depreciation risk exacerbating debt and fiscal vulnerabilities, while increasing global fragmentation could exert pressure on external financing flows, including official development assistance.
Closing Africa's financial gap
At the heart of the 2026 AEO report is a stark assessment of Africa's development financing shortfall: the continent faces an annual gap of more than $1.3 trillion to meet the Sustainable Development Goals. The African Development Bank attributes the deficit to low domestic resource mobilisation, weak financial intermediation and tightening external financing conditions.
However, he argues that the issue is not only of lack of resources, but also of deploying capital effectively.
With appropriate reforms, Africa can reach $1.43 trillion annually through better revenue collection, more efficient public investment, reduction of illicit financial flows and corruption, deeper capital markets, expanded public-private partnerships, diaspora financing and better use of natural capital.
Key opportunities identified include an estimated $469 billion in additional annual revenues from stronger tax and non-tax mobilization, as well as approximately $299 billion in potential savings from improved public investment efficiency. Public-private partnerships have been highlighted as a powerful lever, with each additional dollar of public investment being associated with approximately $1.40 in private investment.
Institutional investors, including pension funds, insurers and sovereign wealth funds, manage approximately $4 trillion of assets; Yet less than 2.7 percent has been allocated to infrastructure and productive sectors in Africa, underscoring significant untapped potential.
The report calls for accelerated efforts to strengthen Africa's financial systems through pan-African banks, integrated capital markets, and innovative tools such as climate and Islamic finance. One of its central pillars is the New African Financial Architecture for Development (NAFAD) (https://apo-opa.co/4uIta9c), which aims to leverage over $4 trillion of assets within Africa's financial ecosystem.
The report also highlights the role of the African Credit Rating Agency, launched in January 2026, as an important tool to address perceived biases in sovereign risk assessments. While Africa's stock market capitalization is set to reach $1.2 trillion in 2024 – a nearly sixfold increase in two decades – activity is concentrated in South Africa, Egypt, Nigeria and Morocco, pointing to the need for broader market integration.
The report underlines the importance of further pursuing continental initiatives, such as the African Financing Stability Mechanism (https://apo-opa.co/4nTP7iR), to ease liquidity pressures, strengthen financial stability and help African countries manage debt refinancing risks at lower costs.
Click here (https://apo-opa.co/4uAYM06) to read the full report
Distributed by APO Group on behalf of the African Development Bank Group (AfDB).
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