AfDB sets stage for 2026 outlook

African Development Bank Group is set to launch the 2026 edition of its Africa’s Macroeconomic Performance and Outlook report on 30 March at its headquarters in Abidjan, Côte d’Ivoire, placing the continent’s growth prospects, debt strains and inflation risks under fresh scrutiny at a time of heightened global uncertainty. The event is expected to draw policymakers, investors and development specialists looking for updated guidance on how African economies are navigating a difficult external environment while trying to sustain reform and investment.

The launch comes with Africa entering 2026 on a mixed footing. The Bank’s November 2025 macro update projected average real GDP growth for the continent at 4.2 per cent in 2025 and 4.3 per cent in 2026, a pace that, if maintained, would keep Africa among the faster-growing regions globally. Yet that headline picture masks wide variation between commodity exporters and importers, reformers and fragile states, as well as economies still wrestling with weak revenues, high borrowing costs and climate-related shocks.

Debt sustainability is likely to be one of the most closely watched themes in the new report. S&P Global Ratings said in February that African governments face more than $90 billion in external debt repayments in 2026, with Egypt, Angola, South Africa and Nigeria among the largest sovereign borrowers confronting heavy redemption schedules. Ratings analysts said the region’s credit profile was stabilising rather than improving decisively, underscoring how vulnerable many states remain to currency swings, slower export earnings and tighter financing conditions.

Market access has improved for some issuers, but it remains uneven and costly. Reuters reported this week that the opening burst of emerging-market borrowing at the start of 2026 has slowed sharply after war-linked disruption involving Iran unsettled investors and drove up risk premiums. That matters for African sovereigns because a large share of refinancing plans depends on external sentiment remaining supportive. Countries with stronger balance sheets may still tap markets, but weaker issuers are increasingly being pushed towards private placements, liability management exercises or multilateral support.

Energy prices and imported inflation are also moving back to the centre of the policy debate. Across parts of Africa, fuel supply concerns have intensified after disruption to oil and liquefied natural gas shipments through the Strait of Hormuz. Mauritius has announced energy-saving measures, Uganda has warned of dwindling stocks, and South Sudan has begun power rationing in Juba. In South Africa, officials have pointed to a surge in diesel buying ahead of expected fuel-price increases, reflecting how quickly external shocks can feed into domestic inflation expectations.

That pressure is already shaping monetary policy. South Africa’s central bank held its benchmark rate at 6.75 per cent this week, saying higher energy prices tied to the Iran conflict had altered the inflation outlook and reinforced the case for caution. Before that escalation, inflation had been tracking closer to target, helping fuel hopes of easier policy. The shift illustrates the dilemma facing many African central banks: easing too soon risks reigniting inflation, while keeping rates high for longer could restrain growth, credit demand and private investment.

For lower-income and more fragile economies, the picture is harder still. Mozambique is seeking renewed engagement with the International Monetary Fund as debt pressures mount and domestic financing options narrow. Reuters reported that public debt rose 6.8 per cent in 2025, while central bank advances to the government surged sharply, a pattern often seen when conventional funding channels are under stress. Cases such as Mozambique are likely to reinforce the Bank’s emphasis on fiscal reform, domestic revenue mobilisation and better debt management as conditions for more durable growth.

At the same time, Africa’s long-term investment case remains intact, and that will form the other side of the debate in Abidjan. Standard Bank said this week that it sees trade and infrastructure financing as major growth drivers across the continent over the next three years, pointing to annual infrastructure needs that remain vast. Corporate interest in sectors linked to transport, energy, critical minerals and urban consumption is still strong, even after earlier expansion waves by multinationals exposed the risks of overestimating household purchasing power and underestimating currency volatility.