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🇳🇬 Nigeria /Economy & Trade

World Bank Cuts Sub-Saharan Africa Growth Forecast to 4.0%, Cites Higher Energy Prices

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

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  • Sub-Saharan Africa's growth is projected to slow to 4.0% in 2026, with per capita GDP growth insufficient to significantly reduce poverty.
  • Higher energy prices will benefit oil exporters like Nigeria and Angola, but increase costs and inflation for non-oil-exporting nations.
  • Rising government debt and limited fiscal resources pose significant challenges for many SSA economies, impacting their ability to manage price shocks and access financing.

The World Bank forecasts a slowdown in Sub-Saharan Africa's economic growth, projecting it to reach 4.0% in 2026. This pace, along with real per capita GDP growth of 1.6% in 2026, is deemed insufficient to substantially alleviate extreme poverty in the region. The outlook, detailed in the June "Global Economic Prospects" report, revises down the 2026 forecast by 0.3 percentage points from January.

The report highlights a mixed impact of higher energy prices. Oil-exporting nations such as Angola and Nigeria are expected to benefit, while non-oil-exporting economies will grapple with increased fuel, fertilizer, and transport costs. This will likely drive up inflation, particularly for food prices, dampening consumption and raising production costs.

the growth forecast for 2026 has been revised down by 0.3 percentage point 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.

— World BankThe World Bank's 'Global Economic Prospects' report explaining the revised growth forecast.

Geopolitical instability, especially the conflict in the Middle East, is expected to negatively impact growth through commodity prices and weaker external demand. However, the report assumes a stabilization of the geopolitical environment and improved security in fragile regions.

Limited fiscal resources are hindering many SSA economies' efforts to manage rising energy and food prices. Despite recent improvements in fiscal positions, high borrowing costs, reduced concessional financing, and declining Official Development Assistance (ODA) add to fiscal challenges, especially for countries slower to enhance policy frameworks. Monetary policy is expected to remain tight due to inflation concerns.

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.

— World BankThe report detailing the heterogeneous impact of energy prices across SSA economies.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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