Sub-Saharan Africa’s recent economic progress is under fresh threat from rising global tensions, as the war in the Middle East begins to push up prices and slow growth across the region, the International Monetary Fund has warned.
Speaking at a press briefing during the IMF Spring Meetings on Thursday, April 16, the IMF Director of the African Department, Abebe Selassie said African economies entered 2026 on a strong footing but are now facing a major new shock.
“Sub-Saharan Africa entered 2026 with the strongest economic momentum it had seen in a decade. And then came the war,” he said.
Selassie explained that 2025 had been a year of strong recovery, with economic growth rising to 4.5 per cent, the fastest pace in over ten years. He said this progress was driven by better policies in many countries, including reforms in nations like Nigeria and Ethiopia.
According to him, these reforms helped improve government finances, reduce inflation, and strengthen economic stability.
“In short, 2025 was a year of hard-won stabilisation gains, and policymakers across the region deserve credit for achieving them,” he said.
However, he warned that the situation has changed in 2026 due to the impact of the Middle East conflict, which has led to higher prices for oil, gas and fertilisers, as well as increased shipping costs and disrupted trade.
“The war in the Middle East is a major new external shock,” Selassie said, adding that it is already affecting trade, tourism, remittances and financial conditions across the region.
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As a result, the IMF has lowered its growth forecast for Sub-Saharan Africa to 4.3 per cent in 2026, while inflation is expected to rise to about 5 per cent by the end of the year.
Selassie noted that the impact of the crisis will not be the same for all countries. Oil-exporting nations may benefit from higher prices, but they still face risks, while oil-importing countries are likely to struggle more with rising costs and weaker economies.
“The impact of the shock is highly uneven,” he said, warning that the human cost could be severe, especially for vulnerable countries.
He also raised concerns about a sharp decline in foreign aid to the region, describing it as another major challenge.
“What we are seeing now appears more structural,” he said, noting that many poor countries depend heavily on aid for basic services like healthcare and food support.
To manage the situation, Selassie advised governments to focus on controlling inflation and protecting the most vulnerable people through targeted support.
“In the near term, countries must keep inflation expectations anchored and protect the most vulnerable,” he said.
He also urged countries to continue economic reforms to boost growth, improve business conditions, and strengthen financial systems.
Looking ahead, Selassie said regional cooperation and better use of technology could help Africa build stronger economies, but only if countries invest in key areas such as electricity, digital infrastructure and skills.
“The gains of 2025 are real, and they are worth defending,” he said, stressing that decisions taken now will determine whether African economies can maintain progress or face new setbacks.
He added that the IMF is ready to support countries in the region with funding, policy advice and technical assistance as they navigate the current challenges.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X