Global Growth Slows, Leaving Africa in Economic Chill

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This decade has begun with numerous economic upheavals affecting various regions across the globe. Challenges such as Covid-19, escalating conflicts, reduced aid to developing countries, rising protectionist measures, and recent crises are poised to transform our world substantially.

Tensions among the United States, Israel, and Iran have led to a downward revision of global growth expectations, from 3.3% to 3.1% for 2026, provided the conflict remains contained in terms of intensity and reach.

In this context, global headline inflation is anticipated to increase slightly.

If the conflict persists, financial markets could face instability, and growth may further decline.

This is the central message from the April 2026 meetings of the International Monetary Fund (IMF) and the World Bank Group, echoing a sense of déjà vu for emerging market and developing economies (EMDEs).

Read:
IMF chief states that global prices will take time to decrease after the conflict
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In this episode of The Business of Africa, we engage with Kearabilwe Nonyana, VIP client manager at PrimeXBT.

He likens the global economy to a tide, with Africa representing the ship.

He discusses strategies for the region to navigate through turbulent times, prepare for impact, and focus on recovery.

Sub-Saharan Africa before the war

Sub-Saharan Africa (SSA) commenced 2026 following a remarkable 2025.

Economic growth accelerated to the fastest rate in over a decade, with GDP rising to 4.5%, up from 4.2% in the previous year.

Ten economies exceeded 6% growth, with Rwanda, Ethiopia, Cote d’Ivoire, Uganda, and Benin among the fastest-growing nations globally.

Median inflation decreased to 3.4% in 2025 from 4.8% in 2024, largely driven by stringent monetary policies, a fall in global food and oil prices, and currency adjustments.

The median fiscal deficit shrank from 3.4% of GDP in 2024 to 3% in 2025, and median public debt reduced to 53.1% in 2025, down from 57.2% the year prior.

During this period, Zambia, Ethiopia, and Ghana progressed with sovereign debt restructuring initiatives.

Eurobond issuances reached $14 billion in 2025, continuing in the initial months of 2026 with an addition of $5.5 billion, which helped to strengthen currencies against the US dollar, enabling central banks in South Africa, Kenya, and Mozambique to lower interest rates.

Revised economic outlook

The IMF cautions that the “hard-won gains” of the region are under threat, with varying impacts on oil-importers and exporters.

For non-resource-rich, oil-importing nations like Cabo Verde, Lesotho, Kenya, Togo, and Comoros, trade balances are expected to worsen as living costs rise.

Conversely, oil-exporting countries such as Nigeria, Angola, South Sudan, the Republic of Congo, and Chad could benefit from increased export revenues.

Read:
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Dangote reports that Nigerian crude supply to refinery doubled in March.

The growth forecast for SSA is now projected to slow to 4.3%, down from 4.6% in January. Median inflation is expected to rise to 5% by year’s end, while the current account deficit could worsen by 1.4% in countries like Eswatini, Senegal, Burundi, and Rwanda, among others.

Median fiscal deficits are expected to soar to 3.2% of GDP this year, 0.2% higher than in 2025.

Despite these challenges, there is a silver lining that has mitigated the total impact of the shock thus far.

Prices of non-fuel commodities such as gold and copper have decreased since the onset of the conflict but remain higher than average for 2025. Encouragingly, median sovereign spreads are still significantly below the levels recorded in April 2025.

The aftershocks

For Africa, the repercussions extend well beyond disruptions in oil, gas, and fertilizer prices, which could further escalate if the conflict drags on, potentially leading to a risk-off sentiment.

The aftershocks will impact remittances, a critical lifeline for countless families, as well as food security.

IMF models predict a 20% surge in global food prices could push an additional 20 million people into moderate or severe food insecurity across the region.

Read/listen:
Kganyago warns of the inflation risks stemming from war
Treasury has the capacity to extend fuel levy relief – Citi’s Gina Schoeman
The ‘petro-dollar’ and why Africa must enhance its energy refining capabilities.

The fund has identified a significant challenge beyond the ongoing shock – living standards.

The IMF states that improvements in living standards in SSA are expected to lag behind those of EMDEs outside the region.

Per capita income growth in other EMDEs is projected at 3.6%, while for SSA, it is 2.3%.

Development expenditure is under threat due to rising interest rates and declining official development assistance. Over one-third of the region is at a high risk of, or already in, debt distress, and in 21 nations, fiscal deficits exceed what is necessary to stabilize debt.

For previous episodes of The Business of Africa podcast, click here.