President William Ruto, Ethiopia’s Prime Minister Abiy Ahmed (right) with other Heads of States and dignitaries during the inauguration of the Grand Ethiopian Renaissance Dam /FILE

Economic
growth in Africa is expected to reach four per cent in 2026 and 4.1 per cent in
2027.

This
is a significant growth compared to 3.5 and 3.9 per cent posted in 2024 and
2025, respectively, according to the World Economic Situation and Prospects 2026 by the United Nations.

The acceleration reflects
stronger macroeconomic stability in several major economies.

However, high debt
servicing costs, limited fiscal space and food inflation continue to weigh on
the prospects for inclusive and sustainable development, the report stresses.

It also highlights trade
tensions, global uncertainty and challenges related to AGOA (African Growth and
Opportunity Act) and the implementation of the African Continental Free Trade
Area (AfCFTA).

The report suggests that
African growth will remain resilient, despite headwinds such as declining
official development assistance, rising trade barriers and an uncertain global
trade and financial environment.

Even so, performance will
vary across sub-regions, with East Africa expected to record the highest growth, at 5.8 per
cent in 2026 compared to 5.4 per cent in 2025, driven by the performance of
Ethiopia and Kenya and supported by regional integration and the expansion of
renewable energy.

North Africa is expected to slow slightly to 4.1 per cent in
2026 after 4.3 per cent in 2025, while West Africa is set to slow to 4.4 per
cent in 2026 after 4.6 per cent in 2025.

Central Africa, on the other hand, is projected to expand by three per
cent this year compared to 2.8 per cent last year, while Southern Africa is
poised to expand by two per cent, up from 1.6 per cent in 2025.

The report estimates that
Africa’s average public debt-to-GDP ratio will reach 63 per cent in 2025, with
interest payments absorbing nearly 15 per cent of public revenue.

It notes that a few
countries have regained access to international markets through new bond
issues. 

At the same time, around 40 per cent of African countries remain in a situation of over-indebtedness or
are at high risk of becoming so, and several are seeking to restructure under
the G20’s common framework.

The report also
highlights that limited fiscal space continues to constrain development
spending, even as reform and consolidation efforts are progressing in some of the
larger economies.

Furthermore, the report shows that African trade grew in 2025, supported by significant exports of
precious metals and agricultural products, as well as increased imports of
transport equipment.

According to the United
Nations, the region’s exposure to global trade tensions remains limited, thanks
to the diversification of export partnerships and exemptions from higher US
tariffs on key products such as crude oil and gold.

However, the expiry of
the African Growth and Opportunity Act (AGOA) and the introduction of new
tariff measures pose challenges for some exporters, particularly in the
clothing sector, while progress in implementing the African Continental Free
Trade Area (AfCFTA) has been slow and uneven, the report indicates.

Globally, the report
forecasts global growth of 2.7 per cent in 2026, slightly below the 2.8 per
cent estimated for 2025 and well below the pre-pandemic average of 3.2 per cent. 

To navigate a period of
trade readjustments, persistent price pressures and climate shocks, the UN
calls for strengthened global coordination and collective action, against a
backdrop of intensifying geopolitical tensions and weakening momentum for
multilateral solutions.

It stresses the
importance of restoring confidence, enhancing predictability and renewing
commitment to an open, rules-based multilateral trading system.