Africa’s economic recovery is set to lose momentum in 2026 as the war in the Middle East adds fresh strain to economies already grappling with high debt, tight financing conditions and limited policy space, finance ministers, central bank governors and the International Monetary Fund warned Tuesday.
In a joint statement issued after a meeting of the African Consultative Group in Washington, chaired by Gambian Finance Minister Seedy Keita, officials said the deteriorating global environment is weighing on the continent’s outlook despite recent stabilisation gains.
The talks, held with IMF management, took place “against the backdrop of the war in the Middle East, which will weigh on growth prospects worldwide, even if the recently announced ceasefire holds,” the statement said.
Even under a relatively benign scenario, global growth is expected to soften, with output projected to expand by 3.1 percent in 2026 and 3.2 percent in 2027. A prolonged conflict or slower recovery in production and transport could further dampen activity, the group warned.
For Africa, the impact is more pronounced, reflecting the region’s vulnerability to external shocks.
“Despite the recent benefits of hard-won stabilisation gains after a strong 2025, growth momentum in Africa is expected to slow down in 2026, contrary to earlier projections,” the statement said.
Real GDP growth across the continent is forecast to ease to 4.2 percent in 2026 from 4.5 percent in 2025. Sub-Saharan Africa is expected to expand by 4.3 percent, while North Africa’s growth is projected at 4.1 percent.
The downgrade underscores the fragility of Africa’s recovery, as countries continue to face elevated debt service costs and constrained access to affordable financing.
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“High debt service burdens, limited access to affordable financing, and growing development needs continue to constrain policy space, particularly in low-income and fragile and conflict-affected countries,” the statement said.
The Middle East conflict adds “another layer of complexity,” with risks including renewed inflation, food insecurity and rising social tensions, it added.
Against this backdrop, African policymakers and the IMF outlined a mix of short-term and structural measures aimed at cushioning the shock while preserving reform momentum.
“The African Consultative Group agreed that policymakers must focus on addressing the shock in the near-term while building resilience over the medium-term,” the statement said.
Priority actions include anchoring inflation expectations, providing targeted and time-bound support to vulnerable households, and maintaining fiscal policies that are both credible and flexible.
Oil-exporting countries were urged to save temporary windfalls and rebuild buffers, while oil importers should protect critical social and development spending even as they step up domestic revenue mobilisation and improve spending efficiency.
However, officials stressed that crisis management alone would not be sufficient to secure durable growth.
African economies should accelerate structural reforms to diversify growth, deepen regional integration and domestic financial markets, and invest in energy and digital infrastructure, including the safe and productive use of artificial intelligence, the statement said.
Debt sustainability also featured prominently in the discussions, with the group highlighting ongoing efforts to strengthen the IMF-World Bank Low-Income Country Debt Sustainability Framework.
“This work is even more critical in the current environment, as war-related shocks are raising macroeconomic vulnerabilities and intensifying existing debt-service pressures,” the statement said.
Enhancements to the framework, including revised measures of debt-carrying capacity, are expected to improve transparency and help countries better assess risks and make informed financing decisions.
Ministers and governors also called on the IMF to sharpen its surveillance and policy advice, urging more tailored support and stronger analysis of economic imbalances and spillovers.
For its part, the IMF reaffirmed its commitment to the region, pledging to continue supporting African countries through policy advice, financing and capacity development.
“The Fund will continue to work closely with African countries to support sound policies, mobilise financing, strengthen resilience, and advance the region’s development objectives in an increasingly complex global environment,” the statement said.
Despite progress in stabilising economies after recent shocks, officials cautioned that Africa’s gains remain fragile, as geopolitical tensions and structural constraints continue to test the continent’s resilience.
