World Bank Lowers Sub‑Saharan Africa Growth Forecast to 4.0%, Cites Rising Energy Prices Boosting Nigeria and Angola

Dike Onwuamaeze

The World Bank’s latest forecast projects Sub‑Saharan Africa (SSA) growth to decline to 4.0 percent in 2026, before rebounding to an average of 4.4 percent in 2027 and 2028.

Real per‑capita GDP growth in SSA is expected to stay at 1.6 percent in 2026, tightening to an average of 2.0 percent per year in 2027 and 2028. This level remains insufficient to achieve significant reductions in extreme poverty.

The report notes that higher energy prices will benefit oil‑exporting countries, especially Angola and Nigeria. Conversely, non‑oil‑exporting economies will face increased fuel, fertilizer and transport costs, which will push inflation higher, particularly in food prices.

Rising government debt poses a key challenge for emerging market and developing economies (EMDEs), as it leads to higher interest rates, larger debt‑service payments and a greater risk of debt distress. Debt levels are positively linked to dollar‑denominated sovereign bond spreads and domestic‑currency government bond yields.

The forecast appears in the June edition of the World Bank’s “Global Economic Prospects.” The document states that the 2026 growth forecast has been revised down by 0.3 percentage points since January, with the negative impact of the conflict in the Middle East expected to outweigh existing growth drivers—including structural reforms and recent trade agreements that support investment and exports.

“The outlook assumes that the geopolitical environment stabilises in the near term and that security improves in economies in Fragile and Conflict‑affected Situations (FCS) in the region,” the report says. “Although the impact of the conflict in the Middle East, operating through higher commodity prices and weaker external demand, is expected to be overwhelmingly negative, it will be heterogeneous across SSA economies.”

“Higher energy prices will benefit oil exporters, particularly Angola and Nigeria. Non‑oil‑exporting economies, on the other hand, will face higher fuel, fertilizer, and transport costs, driving up inflation, especially food prices.”

“Consequently, growth in non‑oil‑exporting economies is expected to be markedly lower than anticipated, as elevated consumer prices and input costs are set to dampen consumption and raise production costs.”

The bank says that limited fiscal resources are restricting efforts to manage rising energy and food prices across many SSA economies, despite improved fiscal positions and buffers in recent years.

Monetary policy is expected to remain tight because of inflation concerns and limited scope to look through inflation shocks.

“Despite overall progress in improving fiscal credibility, high borrowing costs, reduced concessional financing, and declining Official Development Assistance (ODA) are also set to add to fiscal challenges in SSA, especially for economies that have been slower to improve policy frameworks,” the report says.

It adds that structural reforms and recent trade policy changes will only partly offset global headwinds.

“In South Africa, reforms include improved energy availability, whereas in Ethiopia and Nigeria, they include exchange‑rate liberalisation, improvements in public financial management, and other business‑friendly measures.”

The report states that although commodity prices are projected to increase significantly, “weaker external demand and the impact of higher prices on consumption mean that growth for industrial commodity exporters will only edge up from 3.1 percent in 2025 to 3.2 percent in 2026, and an annual average of 3.5 percent in 2027–28.”

“Indeed, the impact of the conflict in the Middle East has led to downward revisions, especially in Nigeria and South Africa, where structural constraints continue to limit growth.”

Non‑resource‑rich economies are expected to see growth slow from 6.4 percent in 2025 to 5.7 percent in 2026, and then average 6.2 percent over 2027–28, though still outpacing commodity exporters.

Ethiopia’s growth is expected to be driven by reforms in monetary policy and the financial sector, despite external challenges.

Notably, growth forecasts have been lowered for Uganda as a result of oil project delays, for Senegal amid revelations of hidden debt and the subsequent freezing of funding from the International Monetary Fund (IMF), and for Côte d’Ivoire on account of falling cocoa prices.

The report says that food insecurity in economies in FCS is set to remain at the highest levels since the early 2000s, while it is projected to increase in economies not in FCS.

“The decline in ODA is also likely to adversely affect living standards and deepen humanitarian and health crises, such as the recent Ebola outbreak,” the report says.