Brazzaville, Congo
Africa’s economies are projected to grow by 4.2 percent in 2026, easing slightly from an estimated 4.4 percent in 2025 before rebounding to 4.4 percent in 2027, according to the 2026 African Economic Outlook released at the African Development Bank Group Annual Meetings in Brazzaville. The report says the continent remains resilient despite geopolitical tensions, tighter global financial conditions and supply chain disruptions.
The Bank said Africa’s 2025 performance was supported by improved macroeconomic management, stronger agricultural output, higher commodity prices and ongoing structural reforms. It added that 22 African economies are expected to post growth of more than 5 percent in 2025, underscoring the continent’s position among the world’s fastest-growing regions.
Released under the theme Mobilizing Africa’s Development Financing at Scale in a Fragmented World, the report argues that sustaining faster and more inclusive growth will require a major shift in the way capital is mobilized and deployed across the continent. It calls for stronger domestic resource mobilisation, deeper financial systems, more integrated capital markets and greater African agency in global finance.
The outlook shows mixed regional performance across the continent. East Africa is expected to remain the fastest-growing region, though growth is projected to slow from 6.6 percent in 2025 to 5.9 percent in 2026 before recovering to 6.4 percent in 2027. The slowdown is attributed to rising energy and import costs linked to disruptions in the Middle East.
West Africa is projected to remain relatively stable at 4.7 percent in 2026, broadly in line with the estimated 4.8 percent in 2025, supported by strong agricultural production and ongoing infrastructure investment. North Africa is expected to grow by 4.0 percent in 2026, down from 4.4 percent in 2025, while Central Africa is set to edge up to 3.8 percent from 3.6 percent, helped by sustained high oil prices.
Southern Africa is forecast to remain the weakest-performing region, with growth of 2.1 percent in 2026 compared with 2.3 percent in 2025, weighed down by weaker mining and agricultural output and higher energy costs.
The report says Africa faces an annual financing gap of more than $1.3 trillion to meet the Sustainable Development Goals. It attributes the shortfall to weak domestic resource mobilisation, poor financial intermediation and tighter external financing conditions. But the Bank says the challenge is not only about the amount of money available, but also about how effectively it is used.
It estimates that Africa could mobilize up to $1.43 trillion annually through better revenue collection, more efficient public investment, reduced illicit financial flows, deeper capital markets and greater use of public-private partnerships and diaspora financing. The report also highlights about $469 billion in potential annual gains from stronger tax and non-tax revenue mobilisation, and $299 billion in possible savings from improved public investment efficiency.
The report points to the need for accelerated reforms to strengthen Africa’s financial systems, including pan-African banks, integrated capital markets and new financing instruments such as climate and Islamic finance. It also highlights the New African Financial Architecture for Development and the African Credit Rating Agency, launched in January 2026, as important tools for improving financing conditions and addressing perceived bias in sovereign risk assessments.
Africa’s stock market capitalisation reached $1.2 trillion in 2024, nearly six times higher than two decades ago, but activity remains concentrated in South Africa, Egypt, Nigeria and Morocco. The Bank says broader market integration will be essential to unlocking more private capital for infrastructure and productive sectors.
The report warns that inflation, projected at 10.4 percent in 2026, remains a major risk to macroeconomic stability. It says persistent geopolitical tensions, energy disruptions, financial market volatility and exchange rate pressures could worsen debt and fiscal vulnerabilities across the continent.
Even so, the African Development Bank says Africa still has significant growth potential if governments and financial institutions move quickly to mobilize capital at scale and strengthen economic resilience. The report argues that with the right reforms, the continent can turn its financing challenge into an engine for long-term development.
