EBRD Forecasts Slower Growth Across Sub-Saharan Africa

Economic growth across Sub-Saharan Africa is expected to moderate in 2026 as higher energy costs, trade disruptions and weaker investment activity linked to ongoing tensions in the Middle East continue to pressure regional economies, according to the latest economic outlook from the European Bank for Reconstruction and Development (EBRD).

The EBRD projects growth in Sub-Saharan Africa to slow to 4.7% in 2026, before edging higher to 4.8% in 2027, reflecting a more challenging external environment and growing uncertainty across global markets.

The bank said the slowdown is being driven by a combination of elevated energy prices, disruptions to international trade flows and reduced investment momentum associated with geopolitical instability.

According to the report, the ongoing conflict in the Middle East has intensified existing vulnerabilities in many developing economies by increasing exposure to commodity price volatility, raising energy and transportation costs and reigniting inflationary pressures.

The bank warned that these developments are placing additional strain on government finances as policymakers seek to shield households and businesses from rising living costs while maintaining fiscal stability.

Higher shipping expenses and increased spending requirements have further complicated economic management across several emerging markets, particularly those heavily dependent on imported energy and food.

Beyond Sub-Saharan Africa, the EBRD revised downward its broader growth forecasts for economies within its regions of operation.

The bank now expects aggregate growth across EBRD economies to slow to 3.1% in 2026, before recovering to 3.6% in 2027. The revised projections are 0.5 percentage points lower for 2026 and 0.1 percentage points lower for 2027 compared with forecasts released in February.

The report assessed countries’ vulnerability to the conflict by examining factors including direct economic disruptions, dependence on imported energy and fertilizers, food import requirements, remittance inflows from Gulf Cooperation Council (GCC) countries, and governments’ fiscal capacity to offset increases in food and energy prices.

Based on these indicators, the EBRD identified Egypt, Jordan, Lebanon, Tunisia, Turkey, Ukraine, Mongolia, Senegal and Kenya among the economies most vulnerable to the ongoing geopolitical and economic disruptions.

These countries face heightened risks due to varying combinations of energy dependence, external financing needs, inflationary pressures and exposure to regional trade and remittance flows.

For many of these economies, rising import costs and weaker external demand could weigh on growth prospects while complicating efforts to maintain macroeconomic stability.

The report also highlighted the policy response adopted by governments worldwide to address rising energy costs.

According to the EBRD, approximately two-thirds of economies within its regions of operation and around one-quarter of countries globally have implemented at least one policy measure aimed at reducing energy consumption or supporting consumers affected by higher energy prices.

These measures range from direct subsidies and price controls to targeted assistance programs designed to mitigate the impact of rising utility and fuel costs on households and businesses.

The EBRD cautioned that the trajectory of global energy markets and geopolitical developments will remain critical determinants of economic performance over the coming years.