Global growth cools, delivering cold economic comfort for Africa

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The start of this decade has been coloured by several economic disruptions in many continents and nations. Covid-19, rising conflicts, bilateral aid cuts for developing nations, a rise in protectionist policies and now a shock that threatens to fundamentally change the world as we know it.

The hostilities between the United States of America, Israel and Iran have resulted in global growth being revised down from 3.3% to 3.1% in 2026, assuming the conflict is limited in velocity and scope.

In this scenario, global headline inflation is expected to rise modestly.

In the event of a drawn-out conflict financial markets could be destabilised and growth further weighed down.

This is the message from the 2026 International Monetary Fund (IMF) and World Bank Group Spring meetings of April, and for emerging market and developing economies (EMDEs) this is déjà vu.

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In this episode of The Business of Africa, we speak to VIP client manager at PrimeXBT, Kearabilwe Nonyana.

He describes the global economy as the tide and Africa the ship.

He outlines how the region can manoeuvre through the storm, brace for impact and prepare for recovery.

Sub-Saharan Africa before the war

Sub-Saharan Africa (SSA) entered 2026 on the back of a stellar 2025.

Economic activity expanded at the fastest pace in over a decade, with GDP growth picking up to 4.5%, from 4.2% the previous year.

Growth surpassed 6% in 10 economies with Rwanda, Ethiopia, Cote d’Ivoire, Uganda and Benin being among the fastest growing economies globally.

Median inflation fell to 3.4% in 2025 from 4.8% the year before, mainly due to tight monetary policy stances, lower global food and oil prices, and exchange rate realignments.

Median fiscal deficit narrowed from 3.4% of GDP in 2024 to 3% in 2025, and median public debt went down to 53.1% in 2025 from 57.2% the previous year.

Zambia, Ethiopia and Ghana made headway with sovereign debt restructuring during this time.

Eurobond issuances reached $14 billion in 2025 and extended into the first two months of 2026 by $5.5 billion, helping currencies appreciate against the US dollar – allowing central banks in South Africa, Kenya and Mozambique among others to reduce interest rates.

Revised economic outlook

The IMF is warning that the “hard-won gains” of the region are under pressure, with the consequences varying between oil importers and exporters.

For oil-importing, non-resource-rich countries including Cabo Verde, Lesotho, Kenya, Togo and Comoros, trade balances are likely to deteriorate while the cost of living goes up.

Meanwhile oil exporters such as Nigeria, Angola, South Sudan, Republic of the Congo and Chad among others stand to benefit from stronger export revenues.

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Growth for SSA is now expected to cool down to 4.3% from January’s projection of 4.6%. Median inflation is expected to lift to 5% by the end of the year. The current account deficit is expected to worsen by 1.4% in Eswatini, Senegal, Burundi and Rwanda, among other non-resource-intensive countries.

Median fiscal deficits are expected to reach 3.2% of GDP this year, 0.2% higher than 2025.

All things considered, there is a silver lining that has lessened the net impact of the shock so far.

Prices of non-fuel commodities such as gold and copper have softened since the start of the conflict but remain higher than average for 2025. Encouragingly, median sovereign spreads continue to be well below the levels seen in April 2025.

The aftershocks 

For the African continent, the shock reverberates far beyond disruptions in the flow of oil, gas, and fertiliser prices, which could be further lifted should the conflict be prolonged thus sparking a risk-off episode.

The aftershocks will be felt in the disruption of remittances, the lifeblood of many families, and food security.

IMF models show a 20% increase in international food prices has the potential to throw 20 million people into moderate or severe food insecurity across the region.

Read/listen:
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The fund has flagged a key challenge beyond the current shock – living standards.

According to the IMF living standards are projected to improve at a much slower rate in SSA compared to EMDEs outside the region.

Per capita income growth in other EMDEs is projected at 3.6% compared with 2.3% for SSA.

Development expenditure remains under threat due to higher interest rates and the decline in official development assistance. More than a third of the region is at high risk of, or already in, debt distress, and in 21 countries fiscal deficits are larger than what is required to stabilise debt.

For previous episodes of The Business of Africa podcast, click here.