Sub-Saharan Africa economy to sustain 4.5 per cent growth despite global turmoil, IMF says

Sub-Saharan Africa economy to sustain 4.5 per cent growth despite global turmoil, IMF says

The IMF warns that renewed energy disruptions, costly sovereign borrowing, further aid cuts and severe weather shocks, particularly El Niño, could derail the outlook.

Sub-Saharan Africa’s economy is projected to maintain 4.5 per cent growth in 2026 and 2027 despite global turmoil, with economic reforms, commodity revenues and private-sector adaptability helping sustain activity.

These factors are cushioning the impact of energy disruptions and tighter financing conditions, although rising import costs and declining foreign aid continue to cloud the region’s economic outlook.

The International Monetary Fund (IMF), in its October 2026 World Economic Outlook, retained its growth forecast for the region at 4.5 per cent this year, matching the pace recorded in 2025, before maintaining the same projection for next year.

The 2026 forecast is 0.2 percentage points higher than the IMF’s April projection, reflecting the region’s ability to absorb external shocks even as rising energy and fertiliser costs, geopolitical tensions and declining foreign aid cloud the outlook.

“Regional output is projected to grow by 4.5 per cent in both 2026 and 2027, after 4.5 per cent in 2025,” the IMF said.

The resilience, however, masks diverging economic fortunes across the region.

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Growth among oil-exporting economies is expected to edge up from 4.0 per cent to 4.1 per cent this year, while other resource-intensive economies are projected to expand by 3.8 per cent.

Non-resource-intensive economies, which recorded stronger growth of 6.4 per cent in 2025, are expected to slow to 6.0 per cent in 2026 as higher import costs and external financing pressures weigh on activity.

The IMF attributes the region’s ability to withstand global disruptions partly to businesses adjusting supply chains, alternative energy shipments and improving domestic economic conditions.

“Global supply adjustment and private-sector adaptation have cushioned the shock, and activity has resumed expanding after the second-quarter slowdown,” reads the report.

Economic reforms have also strengthened the region’s capacity to absorb shocks.

Foreign exchange market reforms and fuel subsidy reductions in Ethiopia and Nigeria, alongside fiscal and monetary improvements and structural reforms in South Africa, have supported more stable economic conditions and investor confidence.

Commodity exporters are also benefiting from higher prices for oil, copper and gold, which can help offset expensive imports and strengthen government revenues.

However, these gains face significant risks.

The IMF projects average oil prices at $96 (Sh12,461) per barrel in 2026, while fertiliser prices are expected to rise by 26 per cent compared with last year.

This is expected to increase pressure on businesses, farmers and food-importing economies.

Regional inflation is also projected to rise, with median inflation increasing from 3.4 per cent in 2025 to 4.3 per cent this year and 5.0 per cent in 2027.

Meanwhile, bilateral aid to the region is projected to fall by another 12 per cent in 2026, following an estimated decline of about a quarter in 2025.

The IMF therefore warns that renewed energy disruptions, costly sovereign borrowing, further aid cuts and severe weather shocks, particularly El Niño, could derail the outlook.

It urges governments to maintain fiscal discipline, protect vulnerable households through targeted support and sustain productive investment to strengthen long-term growth.