IMF lifts sub-Saharan Africa 2026 growth to 4.5 per cent

The International Monetary Fund raised its 2026 growth forecast for sub-Saharan Africa to 4.5 per cent this week, citing the region’s resilience to the Iran war and higher energy prices, while warning that debt, aid cuts and a strong El Niño threaten that outlook.

The new figure is 0.2 percentage points higher than the previous forecast, and the IMF expects the same 4.5 per cent pace in 2027. Yet the fund’s Africa director said growth per person “remains quite weak”: at current rates, the region would need nearly 50 years to double its income, a feat Southeast Asia managed in 15 years.

The October update to the IMF’s Regional Economic Outlook for the region, titled “Resilient Growth, Clouded Outlook,” was released during the fund’s meetings in Bangkok. Ecofin Agency reported on Oct. 15 that oil exporters are expected to grow 4.1 per cent in 2026, up from 4.0 per cent in 2025. Other resource-intensive economies are forecast at 3.8 per cent, unchanged, while less resource-dependent economies are projected to grow 6 per cent, down from 6.4 per cent in 2025.

The IMF said the regional figure “masks substantial divergence,” Semafor reported on Oct. 14. South Africa, the region’s largest economy, is forecast to grow 1.0 per cent, unchanged from the IMF’s July projection, AFP reported. Semafor said that is less than a quarter of the regional pace in both years, as higher oil prices weigh on a fragile outlook. The IMF raised its projection for Nigeria, Africa’s largest crude producer, to 4.2 per cent, citing a “favorable terms of trade effect,” Semafor reported.

Oil-importing economies are the most exposed. Oil, gas and fertilizer prices have risen sharply since late February, AFP reported, and many African countries are net importers of all three. Ecofin said the IMF’s baseline assumes a gradual reopening of the Strait of Hormuz, an average oil price of US$96 a barrel in 2026 falling to $87 in 2027, and fertilizer prices 26 per cent higher in 2026 than in 2025. Median inflation in the region is projected at 4.3 per cent in 2026 and 5 per cent in 2027, up from 3.4 per cent in 2025.

Zeine Zeidane, director of the IMF’s African Department and a former prime minister of Mauritania, told AFP the fund is “very concerned” about El Niño. Forecasters expect this year’s event to peak at an intensity never observed in the modern era, AFP reported. Zeidane said the southern tip of the continent could face intense drought and eastern Africa could see flooding that threatens farm output, with food prices, a large share of household spending, at risk. In the IMF’s El Niño scenario, median growth in 2027 would be 0.5 percentage points below the baseline and median inflation 2.6 points higher, Ecofin reported.

Public finances are a second pressure point. Ecofin reported a median fiscal deficit of 3.3 per cent of GDP in 2026 and median public debt of 51.7 per cent of GDP. Interest payments are expected to take about 12 per cent of median government revenue, excluding grants, over 2025 to 2027. Zeidane said debt-to-GDP ratios are broadly declining in most countries, which he credited to fiscal consolidation and better domestic revenue collection. He also said government borrowing absorbs a large share of available credit and crowds out private firms, and that the lack of institutional investors such as pension funds is a serious gap in local capital markets. Semafor noted the World Bank said last week that nearly four-fifths of African countries spend more on interest than on health or education.

Foreign aid is shrinking at the same time. Ecofin said the OECD projects bilateral aid to sub-Saharan Africa will fall another 12 per cent in 2026, after a drop of roughly 25 per cent in 2025. Further aid cuts are among the IMF’s listed downside risks, along with tighter global financing conditions and diesel and fertilizer supply disruptions. Zeidane also said the Ebola outbreak in the Democratic Republic of Congo is “difficult to contain” and a particular shock for Congo and its neighbours, AFP reported.

The IMF urged governments to continue fiscal adjustment, save part of exceptional commodity export revenue, target help better to vulnerable households, protect productive investment and build ways to raise money quickly after food or energy shocks, Ecofin reported.

The outlook follows a week of global warnings from the fund. Canada News Media has reported on the IMF chief’s warning that “winter is coming” as the Bangkok meetings opened, the IMF’s forecast of a 0.3 per cent contraction in the Middle East and Central Asia, and the G20 finance chiefs ending their talks without a joint statement. The Ebola outbreak Zeidane described is covered in our report that Congo cases have topped 9,000.

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Via Semafor, AFP (through IOL) and Ecofin Agency. Read the originals: Semafor, IOL, Ecofin Agency.