Improved macroeconomic stability supports growth, but monetary and fiscal policy space is limited
Addis Ababa, 22 January 2026 (DESA/ECA) – The Economic Commission for Africa (ECA) today launched the United Nations flagship World Economic Situation and Prospects 2026 (WESP 2026) report at its headquarters in Addis Ababa, highlighting a modest improvement in Africa’s growth outlook.
According to the report, economic growth in Africa is projected to rise to 4.0 per cent in 2026 and 4.1 per cent in 2027, up from 3.5 per cent in 2024 and 3.9 per cent in 2025. The acceleration reflects greater macroeconomic stability in several large economies, supporting investment and consumer spending.
Speaking at the launch, Stephen Karingi, Director, Macroeconomics, Finance and Governance Division at ECA, said that Africa’s improving outlook remains fragile in the face of global uncertainty. “Despite the positive outlook, high debt-servicing costs, limited fiscal space and volatile commodity prices continue to weigh on Africa’s prospects for inclusive and sustainable growth,” Karingi said.
Global output is forecast to grow by 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. During 2025, unexpected resilience to sharp increases in U.S. tariffs, supported by solid consumer spending and easing inflation, helped sustain growth. However, underlying weaknesses persist. Subdued investment and limited fiscal space are weighing on economic activity, raising the prospect that the world economy could settle into a persistently slower growth path than in the pre-pandemic era.
“A combination of economic, geopolitical and technological tensions is reshaping the global landscape, generating new economic uncertainty and social vulnerabilities,” said United Nations Secretary-General António Guterres. “Many developing economies continue to struggle and, as a result, progress towards the Sustainable Development Goals remains distant for much of the world.”
Uneven growth across Africa’s subregions
Presenting the report, Hopestone Chavula, Officer-in-Charge of the Macroeconomic Analysis Section, Macroeconomics and Governance Division, ECA, underscored the uneven nature of the recovery across the continent.
“Africa’s growth recovery remains uneven across subregions. While East Africa continues to lead growth momentum, other parts of the continent are constrained by structural challenges and exposure to external shocks,” Chavula said.
The report notes that Africa’s growth remains resilient but faces headwinds from declining official development assistance, rising trade barriers and an uncertain global trade and financial environment. East Africa is expected to lead regional performance, with growth projected to accelerate to 5.8 per cent in 2026 from 5.4 per cent in 2025, driven by robust performance in Ethiopia and Kenya and supported by regional integration and the expansion of renewable
energy. North Africa’s growth is forecast to ease slightly to 4.1 per cent in 2026, following a strong 4.3 per cent in 2025, underpinned by improved balance-of-payments conditions and a rebound in tourism. West Africa is expected to expand by 4.4 per cent in 2026, down slightly from 4.6 per cent in 2025, amid macroeconomic reforms in Nigeria and high prices for precious metals. In Central Africa, growth is forecast at 3.0 per cent in 2026, below the continental average but above the 2025 estimate of 2.8 per cent, reflecting continued dependence on extractive industries and conflict-related disruptions. Southern Africa’s growth is expected to edge up from 1.6 per cent in 2025 to 2.0 per cent in 2026 but will remain subdued due to structural constraints and heightened exposure to higher United States tariffs.
Debt sustainability and fiscal constraints remain key challenges
Africa’s average public debt-to-GDP ratio is estimated at 63 per cent in 2025, remaining well above pre-pandemic levels, with interest payments absorbing nearly 15 per cent of government revenues. A few countries have regained access to international markets through new bond issuances. At the same time, about 40 per cent of African countries remain in debt distress or at high risk thereof, with several seeking restructuring under the G20 Common Framework. Limited fiscal space continues to constrain development spending, even as reform and consolidation efforts advance in some of the region’s larger economies.
Trade rebounds amid global realignments and tariff shocks
African trade expanded in 2025, supported by strong exports of precious metals and agricultural commodities, alongside rising imports of transport equipment. The region’s exposure to global trade tensions remains limited, reflecting diversified export partnerships and exemptions from higher U.S. tariffs for key products such as crude oil and gold. However, the expiration of the African Growth and Opportunity Act (AGOA) and the introduction of new tariff measures present challenges for some exporters, particularly in the apparel sector. Meanwhile, progress in implementing the African Continental Free Trade Area (AfCFTA) has also been slow and uneven.
Disinflation trend continues, yet cost-of-living pressures persist
Inflation has eased across most African economies, supported by exchange rate stabilization. However, food price inflation remains elevated—above 10 per cent in many countries—reflecting structural vulnerabilities and climate-related shocks. Achieving sustained progress on inflation will require a balanced policy mix, combining credible monetary frameworks to anchor expectations, targeted fiscal measures to support vulnerable households, and strategic investments in food systems and logistics to ease supply constraints.
Call for renewed multilateral action
The report underscores that navigating an era of trade realignments, persistent price pressures, and climate‑related shocks will demand deeper global coordination and decisive collective action at a time when geopolitical tensions are rising, policies are becoming more inward‑looking, and impetus towards multilateral solutions is weakening. Sustained progress will depend on rebuilding trust, strengthening predictability, and renewing the commitment to an open, rules‑based multilateral trading system.
The Sevilla Commitment, the outcome document of the Fourth International Conference on Financing for Development, offers a forward-looking blueprint to strengthen multilateral cooperation, reform the international financial architecture, and scale up development finance. Delivering on its key priorities—including clearer debt workout modalities and expanded concessional and climate finance—is essential to reducing systemic risks and fostering a more stable and equitable global economy.
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The report is available https://bit.ly/UN_WESP2026 and desapublications.un.org .
Media contacts:
Martin Samaan, UN Department of Global Communications, samaanm@un.org
Helen Rosengren, UN Department of Economic and Social Affairs, rosengrenh@un.org
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org