Sub‑Saharan Africa entered 2026 with the strongest economic momentum the region had seen in more than a decade, the International Monetary Fund (IMF) reports in its April 2026 Regional Economic Outlook for Sub‑Saharan Africa – but added that the gains risk being eroded by the war in the Middle East.
Presenting the report – subtitled Hard Won Gains Under Pressure – during a press briefing on Thursday at the IMF/World Bank Spring meetings in Washington DC, Abebe Aemro Selassie, director of the IMF’s African Department, told his audience that after years of overlapping shocks from the pandemic to tightening global financial conditions, 2025 delivered a broad‑based recovery.
Growth had accelerated, inflation fell, fiscal positions improved, and several countries secured long‑awaited sovereign rating upgrades. But the war in Iran has slowed the momentum and halted the trajectory of growth and recovery. The emerging story of stabilisation and renewal is now one of resilience under strain.
Recovery was underway
Selassie stressed 2025 was a year of “hard‑won stabilisation gains, and policymakers across the region deserve credit for achieving them.”
“In 2025, economic activity accelerated across nearly all country groups, with regional growth reaching 4.5%, the fastest pace in over a decade.”
This expansion was driven by a combination of improved external conditions and deliberate domestic policy choices. Exchange‑rate realignments, subsidy reforms, and strengthened monetary frameworks in countries such as Ethiopia and Nigeria helped restore macroeconomic balance.
The results were visible across key indicators: Inflation fell to a median of 3.4%, down from 4.8% in 2024, fiscal deficits narrowed, and public debt ratios declined, while current account balances improved, supported by stronger exports and remittance inflows with several economies recording sovereign rating upgrades, reflecting renewed investor confidence.
Iran conflict reverses positive outlook
The optimism that closed 2025 has, however, been tempered by the outbreak of war in the Middle East. The closure of the Strait of Hormuz and damage to regional energy infrastructure have triggered the most severe energy shock since 2022.
Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), earlier warned that the global economy is feeling the strain of conflict, and that poorer, import‑dependent countries will bear the heaviest burden.
Oil, gas, and fertiliser prices have surged; shipping costs have risen sharply; and trade with Gulf partners has been disrupted. Tourism and remittances – lifelines for many African economies – are weakening.
Against this backdrop, the IMF has revised its projections. Selassie explained that “we have accordingly revised our growth forecast down to 4.3% in 2026, some 0.3 percentage points below our pre‑war projection.”
Inflation, which had been on a steady downward path, is now expected to rise again. The Fund anticipates median inflation climbing to around 5% by end‑2026, reversing much of last year’s progress.
The impact will however be uneven. Oil exporters will see temporary revenue windfalls while remaining exposed to volatility and the risk of pro‑cyclical spending. Oil‑importing economies on the other hand, especially non‑resource‑rich and fragile states, face deteriorating trade balances, rising living costs, and limited fiscal buffers. As Selassie warned, “the human consequences are almost certain to be severe.”
Declining ODA deepening strain
Compounding the shock is a structural decline in official development assistance. The IMF has dedicated an entire chapter in the report to this trend, arguing that the current contraction is unlike previous cycles. Fragile and low‑income countries those most dependent on aid for essential services are being hit hardest.
Selassie was blunt: “What we are seeing now appears much more structural and is falling hardest on the region’s most vulnerable countries.”
For many governments, shrinking aid flows coincide with rising import bills, tightening financial conditions, and growing social pressures; a toxic cocktail that threatens to erode the very gains achieved in 2025.
Despite the challenges, Selassie closed with a reminder of the region’s resilience: “these gains are definitely worth defending, and the policy choices being made now will determine the extent to which they are preserved.”