Sub-Saharan Africa's Economic Growth Projected to Rise Amid Global Challenges

The improved outlook is attributed to strengthened macroeconomic stability, heightened domestic demand, and investments associated with the global energy transition and digital technologies. Despite these positive trends, ongoing conflicts in the Middle East, trade policy uncertainties, stricter financial conditions, and various disasters continue to impact economic activities in several countries. Additionally, growth levels are not sufficient to significantly decrease extreme poverty or meet the job demands of the region's expanding labor force.

Economic activities in the region remain robust, with growth forecasts being upgraded for nearly three-quarters of Sub-Saharan African nations, including Angola, Ethiopia, Nigeria, and Zambia. World Bank Chief Economist for the Africa Region, Andrew Dabalen, stated that years of reforms and improved economic management have generated these gains. An essential next step is to transform this growth into more job opportunities. He emphasized that investing in an AI-ready economy could enhance productivity, spur innovation, and promote structural transformations necessary for improving living standards and alleviating poverty.

The report also indicates that the median inflation rate in Sub-Saharan Africa is anticipated to increase from 3.7% in 2025 to 5.5% in 2026, largely driven by rising global prices of fuel, fertilizers, and food. While public debt has stabilized around 57% of GDP, high costs for debt servicing continue to restrict spending in crucial sectors like health, education, and infrastructure. As development assistance declines, there is increasing pressure on countries to enhance domestic resource mobilization and secure sustainable financing.

Downside risks persist, as further geopolitical tensions could lead to commodity price spikes, exacerbating inflation and weakening fiscal positions. Climate-related shocks, particularly potential El Niño effects, may disrupt agricultural yields and worsen food insecurity, while tighter financing conditions could further limit fiscal capacity.

This edition of the report highlights artificial intelligence's potential to improve productivity, services, and job creation within the region. Currently, most countries are at an early stage of AI adoption, with significant activity concentrated in Kenya, Nigeria, and South Africa. The greatest potential lies in developing affordable, locally adapted AI applications for sectors such as education, agriculture, health, finance, logistics, and public administration. To fully realize these benefits, it is crucial to invest in reliable electricity, affordable internet connectivity, digital skills training, quality data, and governance mechanisms. Strong institutions, technical expertise, and regional collaborations, such as those promoted by the African Union's Continental AI Strategy and the African Continental Free Trade Area, will further support the scaling of AI solutions to create more and better jobs.