IMF raises Africa's regional economic outlook to 4.5%

The International Monetary Fund (IMF) has raised its 2026 economic growth forecast for sub-Saharan Africa to 4.5%, highlighting the region's resilience amid various global shocks. This includes the war between the US and Iran, global energy supply adjustments, and private sector adaptations which helped cushion the impact.

However, South Africa's growth forecast remains considerably lower at 1.0%, unchanged since July. The IMF's Africa Director, Zeine Zeidane, expressed concern that while growth has been resilient, it needs to increase to match other regions. He pointed out that it would take nearly 50 years for the region to double its income per capita, compared to Southeast Asia's 15 years.

Most African countries have managed to maintain growth rates without jeopardizing their public finances due to fiscal consolidation and better domestic revenue mobilization. However, debt servicing still occupies a significant portion of public spending, averaging 12% of GDP, with some countries seeing up to 33%. This crowding out of private sector financing is a major concern.

The IMF is particularly worried about the impact of the El Niño climate phenomenon, which is expected to peak at an intensity never seen in the modern era. This could severely affect agricultural production and electricity generation, particularly in southern Africa. The region might face a significant drought cycle, while eastern Africa could be hit by flooding.

Another concern is the health situation in the Democratic Republic of Congo, where an Ebola outbreak is proving difficult to contain. This could pose a threat not only to Congo but also to its neighboring countries.