Shallon Mwiza
East Africa is projected to remain Africa’s fastest-growing region in 2026 and 2027 despite growing global uncertainty, according to the 2026 African Economic Outlook released by the African Development Bank Group (AfDB) during its Annual Meetings in Brazzaville on May 26.
The report projects East Africa’s economy to moderate to 5.9 per cent in 2026 down from 6.6 per cent in 2025 before it recovers to 6.4 per cent in 2027.
Africa’s economy is projected to grow to 4.4 per cent in 2027 up from 4.2 per cent in 2026.
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“Even after factoring in the impacts of the Middle East crisis, Africa’s real GDP growth is still projected at about 4 per cent by the end of 2026, placing the continent among the best-performing regions globally alongside Asia,” AfDB Chief Economist Kevin Chika Urama, said during the report presentation.
The East Africa region continues to outperform other parts of the continent, with North Africa projected at 4.2 per cent in 2027, West Africa at 4.5 per cent, Central Africa at 4.1 per cent, and Southern Africa at 2.7 per cent.
According to the report, 21 African countries are expected to record growth above 5 per cent in 2027. Five countries including Rwanda could surpass 7 per cent growth.
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Countries in East Africa continue to benefit from strong services activity, infrastructure investment, and regional trade integration, which have supported growth momentum in recent years.
Africa’s outlook
Africa’s macroeconomic environment remains mixed, with inflationary pressures, debt servicing costs, exchange rate volatility, and climate shocks continuing to pose risks to growth.
“While Africa remains one of the fastest-growing regions in the world, GDP per capita growth remains low, meaning growth is not yet translating sufficiently into jobs, productivity, and structural transformation,” Urama said.
Across Africa, consumer price inflation is projected to ease from 13.8 per cent in 2025 to 10.4 per cent in 2026 and then to 8.9 per cent in 2027, signalling gradual improvement in price stability after several years of elevated inflation across many economies.
The decline is attributed to increased agricultural output and benefits of tight monetary policy in previous months. Even so, inflation in 2026 is projected to remain below 5 per cent in 26 countries, including Rwanda.
As of April 2026, currencies of 27 countries had depreciated against the US dollar.
The Bank warned that rising debt servicing obligations are tightening fiscal space across the continent, with debt service estimated at about one-third of government revenue in 2024 in many African countries.
“Increasing commercial borrowing is making debt refinancing more expensive for many African countries, with debt servicing costs taking resources away from development financing,” Urama said.
Despite the challenges, the report argues that Africa still holds significant untapped financing potential through domestic revenue mobilisation, institutional investors, diaspora financing, and stronger governance reforms.
Africa’s development challenge, Urama noted, is not a lack of resources, but how to mobilise and manage capital more efficiently, highlighting that improving governance, transparency and public service delivery would be critical to rebuilding trust between governments and citizens.
New Times
