Sub-Saharan Africa Growth Forecast Up to 4.3% World Bank Says

The World Bank has increased its economic growth projections for Sub-Saharan Africa, citing strengthening investments and exports as key factors. The updated forecasts are included in the January 2026 Global Economic Prospects (GEP) report, which notes increased resilience in several regional economies.

Economic activity in the region is now projected to reach 4.0% in 2025, a 0.3 percentage point increase from the previous forecast in June. This growth is supported by moderating inflation and increased fiscal revenues, particularly due to higher commodity prices for gold, precious metals, and coffee.

Regional Economic Performance

Performance across Sub-Saharan African economies varied, with growth slowing in industrial commodity exporting nations while strengthening elsewhere. Nigeria and South Africa experienced firmer growth, while Ethiopia saw a moderation.

South Africa’s growth rose to 1.3%, attributed to a more reliable electricity supply, a successful agricultural harvest, and improved business confidence. Nigeria’s growth edged up to 4.2%, driven by expansion in the services sector, particularly finance and information and communication technology, alongside a modest recovery in agriculture. Ethiopia’s growth eased to 7.2% from 8.1% in 2024, despite strong agricultural performance, gold and electricity production, and ongoing structural reforms. However, Ethiopia remains in debt distress, with ongoing debt restructuring negotiations.

Inflation and Financial Conditions

Headline inflation in Sub-Saharan Africa continued to ease in 2025, influenced by lower global energy and food prices and strong agricultural harvests. Core inflation, however, increased for the first time in two years, prompting some central banks to pause monetary policy easing or raise policy rates.

Financial conditions generally improved, with declining government bond yields, narrowing sovereign spreads, and currency appreciation against the U.S. dollar. Several economies, including Angola, Kenya, Nigeria, and the Republic of Congo, regained access to international capital markets.

Future Growth Projections

The World Bank has revised its regional growth forecasts upwards for the next two years, citing ongoing reforms, domestic investment growth, and easing inflation. Projected growth rates are 4.3% in 2026 and 4.5% in 2027, both 0.2 percentage points higher than the June forecasts, though still below the region’s long-term average.

Growth in non-resource-rich countries is expected to outpace that of industrial commodity exporters, reaching 6.1% in 2026 and 6.2% the following year. Solid activity is anticipated in Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda.

Per Capita Growth and Challenges

Sub-Saharan African economies are forecasted to experience an average per capita growth of 2% annually over the next two years. While slightly faster than previously envisioned, this growth is considered insufficient to significantly reduce extreme poverty.

The region, home to an estimated 270 million youths in 2025 and facing the world’s largest rise in the working-age population, may struggle to create enough jobs to keep pace with labor force growth.

Risks and Opportunities

Several risks could impact the regional economic outlook, including weaker-than-expected external demand, lower commodity prices, increased political instability, and worsening conflict. Further declines in donor support could also heighten vulnerability to shocks.

Conversely, economic activity could be bolstered by duty-free access to China, stronger-than-expected global growth, continued progress in regional integration, and firmer commodity prices.