The World Bank has published its biannual Africa Economic Update, warning that Sub-Saharan Africa’s recovery is showing signs of stalling and revising its 2026 growth projection down by 0.3 percentage points from estimates published in October 2025. The report projects regional growth of 4.1% in 2026, unchanged from 2025, but highlights mounting downside risks and forecasts inflation rising to 4.8% in 2026. Geopolitical risks, including the conflict in the Middle East, alongside high debt-service burdens and long-standing structural constraints, are expected to weigh on activity, with rising fuel, food and fertilizer prices and tighter financial conditions disproportionately affecting vulnerable households. Debt dynamics are tightening fiscal space, with public capital investment about 20% below 2014 levels and the external public debt service-to-revenue ratio doubling from 9% in 2017 to 18% in 2025, compounded by declining external financing and reduced development assistance. The report argues for targeting scarce resources to protect vulnerable households while maintaining macroeconomic stability through inflation control and prudent fiscal management, and it links longer-term job creation needs to more productive, diversified, private-sector-led growth. A dedicated section on industrial policy recommends focusing on learning and upgrading toward higher-value goods and services, applied sparingly and supported by implementation capacity, performance benchmarks, credible exit strategies and deeper regional integration, including through the African Continental Free Trade Area.

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