An Englishman’s Take on Africa’s Economic Prospects

Introduction to the Report

The Economic Commission for Africa (ECA) recently launched the much-anticipated United Nations World Economic Situation and Prospects 2026 (WESP 2026) report. It was unveiled at the ECA’s headquarters in Addis Ababa. This latest edition highlights a modest improvement in Africa’s growth outlook. For those keen on a detailed read, the full report is accessible on desapublications.un.org.

Africa’s Economic Forecast

According to the report, Africa’s economic growth is poised for an increase. Expectations are set for a rise to 4.0% in 2026, progressing slightly to 4.1% by 2027. This is up from the 3.5% projected for 2024 and 3.9% in 2025. The future appears brighter, largely due to greater economic stability in key economies, which supports investment and consumer spending.

Challenges on the Horizon

However, it’s not all rosy. Stephen Karingi, Director of the Macroeconomics, Finance and Governance Division at ECA, cautioned that Africa’s outlook remains fragile amid global uncertainties. Issues such as high debt-servicing costs, limited fiscal space, and fluctuating commodity prices could dampen prospects for sustainable growth.

Global Economic Context

World output is forecast to grow by 2.7% in 2026, slightly below the 2.8% estimated for 2025. This is significantly less than the pre-pandemic average of 3.2%. Resilience during 2025 was partly due to robust consumer spending and easing inflation, despite tariff increases in the U.S.

Geopolitical Influences

UN Secretary-General António Guterres notes that economic, geopolitical, and technological tensions are reshaping the global landscape. He emphasized that many developing economies struggle to advance towards Sustainable Development Goals, casting a shadow over progress.

Uneven Growth Across Africa

Hopestone Chavula from ECA highlighted the uneven growth across the African continent. East Africa is at the forefront, expected to grow by 5.8% in 2026, driven by Ethiopia and Kenya. Meanwhile, North Africa’s growth is predicted to slightly decrease to 4.1% in 2026, with tourism playing a significant role.

Regional Growth Projections

• West Africa: Anticipated to reach a 4.4% growth rate in 2026, though slightly down from 4.6% in 2025.
• Central Africa: Forecasted to grow by 3.0% in 2026, benefiting from extractive industries despite conflicts.
• Southern Africa: Expected modest growth from 1.6% in 2025 to 2.0% in 2026 amid structural constraints.

Fiscal Challenges and Debt

Africa’s public debt-to-GDP ratio is estimated at 63% in 2025. Interest payments consume nearly 15% of government revenues. Around 40% of African nations are either in debt distress or at a high risk of it. Some countries have ventured back into international markets through bond issuances. However, fiscal space remains tight, hampering development progress.

Trade and Tariff Impacts

In 2025, African trade flourished due to strong exports of precious metals and commodities. Nonetheless, trade tensions globally and the expiration of the African Growth and Opportunity Act (AGOA) pose challenges. The African Continental Free Trade Area (AfCFTA) holds promise, but its progress has been slow.

Inflation and Cost of Living

Disinflation trends have been observed, helped by stable exchange rates. Yet, food price inflation remains a bugbear, with levels over 10% in numerous countries. A balanced approach involving monetary frameworks and strategic investments is vital to ease these pressures.

The Call for Multilateral Action

The report strongly suggests that navigating trade realignments and climate-related shocks requires global cooperation. Renewing commitment to an open, rules-based trading system is paramount. The Sevilla Commitment offers a strategic plan to bolster multilateral cooperation and reform financial structures.

In summary, while there is optimism in the air, a concerted global effort will be essential to ensure sustainable growth across Africa. Keeping an eye on these dynamic shifts will be crucial for stakeholders and policymakers alike.