Nairobi — The World Bank has raised its forecast for economic growth in Sub-Saharan Africa to 4.3% in 2026, from 4.1% previously, citing stronger-than-expected performance across much of the region.

The upgrade, contained in the World Bank’s latest Africa Economic Update, reflects improved economic performance in several major African economies, despite higher energy prices and disruptions to global supply chains linked to the conflict in Iran.

Africa’s economy grew by 4.1% in 2025, according to the lender.

Growth Broadens Across Africa

The World Bank said growth forecasts had been upgraded for nearly three-quarters of countries in the region, signalling increased confidence that economic reforms undertaken by several governments are beginning to deliver results.

Zambia, Nigeria, Ethiopia and Angola were among the economies whose growth outlooks were upgraded, with the World Bank pointing to economic reforms and improved macroeconomic management as key factors.

“Economic activity in Sub-Saharan Africa continues to demonstrate remarkable resilience,” said Andrew Dabalen, the World Bank’s chief economist for Africa.

However, stronger headline growth has not yet translated into a comparable improvement in living standards. Per-capita income growth is expected to rise to just 1.8% in 2026, from 1.6% last year.

Debt Remains a Major Constraint

The World Bank said the region’s overall debt-to-GDP ratio has stabilised at around 57%, but debt servicing remains a significant burden.

About half of African countries are either in default or facing difficulties servicing their debt, highlighting the continued pressure created by high borrowing costs and elevated debt-service payments.

The lender also warned that a prolonged conflict in the Middle East, the potential impact of El Niño, high interest rates in advanced economies and elevated debt costs could undermine the region’s growth outlook.

World Bank Calls for Greater AI Investment

Beyond macroeconomic reforms, the World Bank is urging African governments to make greater use of artificial intelligence (AI) as a way to raise productivity, create jobs and turn economic growth into better living standards.

Dabalen said Africa does not need to replicate the huge AI investments being made by the United States and other advanced economies to benefit from the technology.

Instead, countries can focus on practical and relatively low-cost AI applications that work on affordable devices and address specific economic challenges.

Potential applications include AI-powered learning tools for students, systems that help farmers identify and manage livestock diseases, and automated accounting and administrative services for small businesses.

The World Bank also highlighted shared data centres and stronger data-protection frameworks as important infrastructure for wider AI adoption.

Source:Reuters

Reporting:Duncan Miriri

Editing:Xevi Fontdegloria