IMF raises sub-Saharan Africa growth outlook

The International Monetary Fund (IMF) has upgraded its growth forecast for sub-Saharan Africa to 4.5% for the year 2026, positioning the region among the world's fastest-growing regions. This projection, slightly higher than the July estimate of 4.3%, "hides substantial divergence," according to the IMF. The sharpest contrast is observed between oil-importing economies and those that are not, as the latter are more vulnerable to the impacts of Iran-war-related supply chain disruptions on energy and food prices.

South Africa, the continent's largest economy, is projected to grow at a rate more than four times slower than the regional average this year and next due to the adverse effects of higher oil prices on its already fragile economic situation. Conversely, the IMF has raised its projected growth rate for Nigeria, Africa's leading crude oil producer, to 4.2%, citing a "favorable terms of trade effect."

Globally, the IMF has identified the rising national debt as a mounting risk to financial stability, particularly as borrowing costs soar. In a related development, the World Bank reported last week that nearly four-fifths of African countries spend more on servicing debt than on vital sectors such as health and education.