Africa is on course to outpace global economic growth through 2027, but a sharp surge in oil prices and widespread currency depreciation are testing the continent’s resilience, according to new research from the African Export-Import Bank (Afreximbank).
The continent’s gross domestic product (GDP) is projected to expand 4.4% in 2026 and 4.5% in 2027, following an estimated 4.3% in 2025, driven by reform momentum and a recovery in domestic demand. That compares with global growth of approximately 3.3%, underscoring Africa’s relative strength even as mounting external pressures complicate the outlook.
The near-term risks, however, are intensifying. A sharp escalation in Middle East geopolitical tensions has disrupted oil supply flows and pushed Brent crude prices above $110 a barrel, fueling inflation risks and widening trade deficits for energy-importing nations. The price surge has simultaneously strengthened the United States dollar, triggering broad currency depreciation across African markets.
Most African currencies weakened against the dollar during February and March, reflecting global risk aversion and tighter liquidity. Egypt’s currency declined approximately 12% within a single month, while Zambia, Uganda, and South Africa also recorded meaningful losses. The depreciation is expected to raise import costs for food and fuel, sustaining price pressures even as headline inflation continues to ease. Continental inflation is projected to fall to 10.4% in 2026 from 13.6% in 2025, though at least 11 countries still face double-digit rates.
Growth is not uniform across the continent. Eastern Africa is forecast to lead with expansion of 6.6% in 2026, supported by infrastructure investment and services growth, while Southern Africa is expected to lag at 2.2%, held back by energy shortages and structural bottlenecks. Egypt, Nigeria, and South Africa are projected to anchor continental performance, while smaller, commodity-dependent economies remain more exposed to external shocks.
The oil price surge presents a divergent picture for African states. Exporters such as Nigeria and Angola stand to gain from improved fiscal revenues, while importers including Kenya and Morocco face worsening current account deficits alongside elevated inflation risks.
On capital markets, African sovereigns are gradually regaining access to international bond markets after a prolonged absence, raising approximately $5.4 billion in Eurobonds by the end of February. Kenya, Côte d’Ivoire, and the Republic of Congo led the issuances, though borrowing costs remain elevated due to persistent risk premiums. Credit rating outlooks have begun to improve for some countries, signaling cautious investor optimism, but access remains concentrated among higher-rated and reform-oriented economies.
Afreximbank identifies three structural pressures shaping Africa’s medium-term trajectory: exposure to commodity price cycles, exchange rate vulnerability, and constrained fiscal space amid rising debt servicing costs. The bank argues that sustaining growth will require deeper structural transformation, including export diversification, stronger domestic revenue mobilization, and greater resilience to external volatility.
Africa’s near-term growth path remains intact, but increasingly conditional on a global environment that is becoming harder to navigate.
