The European Bank for Reconstruction and Development (EBRD) has projected a moderation in economic growth across its sub-Saharan Africa (SSA) economies over the next two years, as higher energy costs, trade disruptions, and global uncertainty continue to affect the region.
According to the Bank’s latest Regional Economic Prospects (REP) report, growth across the economies where the EBRD invests in sub-Saharan Africa is expected to slow to 4.7 per cent in 2026, down from 5.2 per cent in 2025, before edging up slightly to 4.8 per cent in 2027.The report highlights that the economic impact of ongoing geopolitical tensions, particularly the conflict in the Middle East, has created additional challenges for countries across the region.
Rising energy prices and increased freight costs have added inflationary pressures, while weaker investment activity and disruptions to international trade have affected growth prospects. These factors come on top of existing challenges such as fiscal vulnerabilities, commodity price fluctuations, and growing public spending commitments ahead of elections in several countries.
Despite these headwinds, economic activity in many SSA economies continues to be supported by strong commodity production, infrastructure investment, and resilient domestic demand. The region has shown a degree of resilience in the face of external shocks, although growth forecasts have become less favourable compared with earlier expectations.
Among the countries covered in the report, Benin is expected to remain one of the region’s strongest-performing economies. The EBRD forecasts economic growth of 7.0 per cent in 2026, following an impressive expansion of 8.1 per cent in 2025. Growth is expected to moderate slightly further to 6.7 per cent in 2027.Benin’s strong performance has been driven by expansion in construction, agriculture, manufacturing, and services.
The successful completion of an International Monetary Fund-supported programme in early 2026 also contributed to improved investor confidence and economic stability. Inflation has remained under control, with prices falling by 0.4 per cent in March 2026 due to lower food costs. Government finances have strengthened as well, with the fiscal deficit narrowing to 2.7 per cent of GDP and public debt declining to 52 per cent of GDP.
While the outlook remains positive, the country faces risks related to rising production costs and ongoing security concerns.In Côte d’Ivoire, economic growth is expected to reach 6.1 per cent in 2026, compared with 6.5 per cent in 2025, before returning to 6.5 per cent in 2027. The country continues to benefit from strong performance in agriculture, manufacturing, and construction, as well as solid export activity.Exports of cocoa and rubber have played a key role in supporting economic growth, helping reduce the current account deficit to just 0.7 per cent of GDP.
Improved tax collection has also strengthened public finances, allowing the fiscal deficit to fall to 3.0 per cent of GDP, in line with regional fiscal targets set by the West African Economic and Monetary Union. Inflation remains relatively low despite a modest increase in 2026. Looking ahead, strong domestic demand and export activity are expected to support growth, although declining cocoa prices and weaker global demand could present challenges.Kenya’s economy is projected to maintain stable growth in the near term.
After expanding by 4.6 per cent in 2025, GDP is expected to grow by the same rate in 2026 before accelerating slightly to 4.9 per cent in 2027.The EBRD expects growth in construction, services, and mining to offset weaker performance in agriculture and manufacturing. Inflation increased to 4.4 per cent in March 2026 as higher global oil prices pushed up transportation and production costs. The Kenyan shilling has remained relatively stable despite these pressures. However, public finances continue to face significant challenges.
Government debt has reached 70 per cent of GDP, while debt servicing consumes approximately half of government revenues. The fiscal deficit widened to 6.1 per cent of GDP, highlighting the pressure on public finances. Rising energy costs, uncertainty ahead of the 2027 elections, and potential delays in securing a new IMF support programme remain important risks to the outlook.Nigeria, Africa’s largest economy, is expected to experience modest growth over the forecast period.
The EBRD projects GDP growth of 4.1 per cent in 2026, up slightly from 4.0 per cent in 2025, before easing to 3.9 per cent in 2027.Economic activity continues to be supported by strong performance in the services, industrial, and agricultural sectors. Oil production has remained relatively stable at approximately 1.46 million barrels per day, close to the production quota agreed by the Organization of Petroleum Exporting Countries (OPEC).
Inflation, however, remains a challenge. After declining throughout much of 2025, inflation rose again to 15.4 per cent in March 2026. Public debt remains relatively moderate at 36 per cent of GDP, but debt servicing costs continue to place a significant burden on government finances, accounting for more than 70 per cent of federal revenues. Election-related uncertainty and persistent inflation are expected to remain key concerns, although higher oil prices could provide additional government revenue if maintained.
Senegal is expected to experience a significant slowdown in growth following an exceptionally strong performance in 2025. The EBRD forecasts economic growth of 2.5 per cent in 2026 and 2.7 per cent in 2027, compared with 6.7 per cent growth in the previous year.The strong expansion in 2025 was largely driven by hydrocarbon production, particularly from the Sangomar oil field, where output exceeded 36 million barrels. Increased oil exports helped reduce the country’s current account deficit from 11.5 per cent of GDP to 5.6 per cent.
Public finances also improved, with the fiscal deficit narrowing to 6.4 per cent of GDP, while inflation eased to 0.8 per cent in early 2026.Despite these positive developments, Senegal continues to face fiscal challenges. Government debt remained high at 120 per cent of GDP at the end of 2025, while concerns over previously undisclosed debt have affected investor confidence.
In March 2026, Standard & Poor’s downgraded the country’s local-currency credit rating, citing refinancing risks and delays in negotiations over a new IMF support programme. These factors are expected to weigh on economic growth in the coming years.Overall, the EBRD’s latest outlook suggests that sub-Saharan Africa will continue to grow at a relatively solid pace despite mounting global uncertainties.
Strong commodity production, infrastructure investment, and domestic demand remain important sources of support. However, higher energy prices, fiscal pressures, inflation risks, and geopolitical tensions are likely to continue influencing economic performance across the region. The ability of governments to manage these challenges while maintaining investment and fiscal stability will play a crucial role in shaping growth prospects in the years ahead.
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