The UN has released its 'World Economic Situation and Prospects 2026' report, and its launch in Africa took place at the Addis Ababa head office of the UN Economic Commission for Africa (ECA). Regarding Africa, the report forecasts a modest improvement in economic growth for the continent.

African economic growth is predicted to be 4% for this year and 4.1% next year. The continent achieved 3.9% last year and 3.5% in 2024. The upward trend is the result of improved macroeconomic stability in a number of Africa’s large economies.

“Despite the positive outlook, high debt-servicing costs, limited fiscal space and volatile commodity prices continue to weigh on Africa’s prospects for inclusive and sustainable growth,” cautioned ECA Macroeconomics, Finance and Governance Division director Stephen Karingi. The continent’s economic growth is fragile, however, because of the continuing global uncertainty.

But this growth is not uniform. And the implementation of the African Continental Free Trade Area has been slow and uneven.

“Africa’s growth recovery remains uneven across subregions,” pointed out ECA Macroeconomics and Governance Division, Macroeconomic Analysis Section officer-in-charge Hopestone Chavula. “While East Africa continues to lead growth momentum, other parts of the continent are constrained by structural challenges and exposure to external shocks.”

East African growth, driven by strong performances by Ethiopia and Kenya, is expected to be 5.6% this year (up from 5.4% last year). West Africa is forecast to grow at 4.4% this year, a slight deceleration over last year’s 4.6%. North Africa will also see a small decline, to 4.1% this year, after last year’s 4.3%. Central Africa will see growth of 3% this year, compared with 2.8% last year. Southern Africa should grow by 2% this year, an improvement over last year’s 1.6%.

“Africa’s growth remains resilient but faces headwinds from declining official development assistance, rising trade barriers and an uncertain global trade and financial environment,” stated the ECA. “African trade expanded in 2025, supported by strong exports of precious metals and agricultural commodities, alongside rising imports of transport equipment. The region’s exposure to global trade tensions remains limited, reflecting diversified export partnerships and exemptions from higher US tariffs for key products such as crude oil and gold. However, the expiration of the African Growth and Opportunity Act (Agoa) and the introduction of new tariff measures present challenges for some exporters, particularly in the apparel sector.”

African countries had an estimated average public debt-to-GDP ratio of 63% last year. This is still way above the levels recorded before the Covid-19 pandemic. Interest payments required almost 15% of government revenues. While a small number of African countries have regained access to international markets through new bond issuances, some 40% of them remain either in debt distress or in high risk of debt distress. Development spending remains constrained by limited fiscal space. Some of the continent’s larger economies are implementing reform and consolidation programmes.

Inflation has decelerated in most African countries, but food inflation remains high, running at more than 10% in many countries. The high food inflation is a consequence of structural weaknesses, including supply constraints, and climate-related shocks.

“The report underscores that navigating an era of trade realignments, persistent price pressures, and climate‑related shocks will demand deeper global coordination and decisive collective action at a time when geopolitical tensions are rising, policies are becoming more inward‑looking, and impetus towards multilateral solutions is weakening,” highlighted the ECA. “Sustained progress will depend on rebuilding trust, strengthening predictability, and renewing the commitment to an open, rules‑based multilateral trading system.”