Sub-Saharan Africa’s economy remains resilient despite geopolitical tensions, climate shocks, declining development assistance, and fiscal pressures. Growth in the region is projected to rise from 4.1% in 2025 to 4.3% in 2026, 0.3 percentage points above the April 2026 forecast, according to the latest edition of the Africa Economic Update, the World Bank Group’s biannual economic report for the region.
The outlook is supported by improved macroeconomic resilience, stronger domestic demand, and investments linked to the global energy transition and digital technologies. However, conflict in the Middle East, trade policy uncertainty, tighter financial conditions, natural disasters, disease outbreaks, and insecurity continue to affect economic activity across several countries. Growth also remains insufficient to substantially reduce extreme poverty or create enough jobs for the region’s rapidly growing labor force.
“Despite a challenging global environment, economic activity in Sub-Saharan Africa continues to demonstrate remarkable resilience, with growth forecasts upgraded for nearly three-quarters of countries in the region, including Angola, Ethiopia, Nigeria, and Zambia,” said Andrew Dabalen, World Bank Chief Economist for the Africa Region. “These gains reflect years of reforms and improved economic management. The next challenge is turning growth into more jobs and better opportunities. By investing in the foundations of an AI-ready economy, African countries can unlock productivity gains, spur innovation, and accelerate the structural transformation needed to raise living standards and reduce poverty.”
The report projects median inflation rate in Sub-Saharan Africa is projected to rise from 3.7% in 2025 to 5.5% in 2026, as higher global fuel, fertilizer, and food prices reverse some recent gains. Public debt has broadly stabilized at around 57% of GDP, but high debt-service costs continue to limit spending on health, education, and infrastructure. With development assistance declining, countries face growing pressure to mobilize domestic resource mobilization, deepen local capital markets, and secure more sustainable financing.
Risks remain tilted to the downside. Further geopolitical tensions could trigger additional increases in commodity prices, intensify inflation, and weaken external and fiscal balances. Climate-related shocks, including the effects of a potential El Niño event, could disrupt agricultural production and worsen food insecurity, while tighter financing conditions would further constrain fiscal space.
This edition’s special focus examines how artificial intelligence can raise productivity, improve services, and create jobs. Most countries are still at an early stage of AI adoption, with activity concentrated in a small number of economies, notably Kenya, Nigeria, and South Africa. The region’s greatest opportunity lies in affordable, locally adapted small AI applications, meaning low bandwidth tools for education, agriculture, health, finance, logistics, and public administration, rather than frontier AI systems.
Realizing these benefits will require investments in reliable electricity, affordable connectivity, digital skills, quality data, compute infrastructure, and effective governance. Strong institutions, technical capacity, implementation, and regional cooperation, including through the African Union’s Continental AI Strategy and the African Continental Free Trade Area, can help scale AI-enabled solutions and support more and better jobs. Enditem
Source: World Bank
