Africa is projected to grow faster than the global economy through 2027, but more than $90 billion in external debt repayments and the fallout from the Middle East conflict threaten to test the continent’s hard-won economic stability, according to Afreximbank research.
The continent’s economy is forecast to expand 4.2% in both 2026 and 2027, compared with projected global growth of 3% in 2026 and 3.4% in 2027, Afreximbank said in its August report on the African macroeconomic environment. Eastern Africa is expected to lead regional growth at 6.2% in 2026, while Southern Africa is forecast to expand just 1.9%.
African economies face a combination of higher energy and food costs, persistent inflation, elevated global interest rates and rising geopolitical risks. Afreximbank said the Middle East conflict has created a multi-channel shock, increasing oil and gas prices, fertilizer costs, shipping expenses and war-risk insurance premiums while putting pressure on trade, remittances and foreign-exchange reserves.
The bank identified sovereign debt as Africa’s biggest macro-financial vulnerability, projecting that external debt repayments will exceed $90 billion this year. Egypt accounts for about one-third of the total, followed by countries including Angola, South Africa and Nigeria.
Higher commodity prices could further complicate the outlook. Afreximbank projects crude oil prices to average about $89 a barrel in 2026, 32% above the 2025 average, while fertilizer prices are expected to rise 26% and food prices by about 8%.
The increases pose the greatest risk to African economies heavily dependent on imported fuel, food and fertilizer, potentially widening trade deficits, weakening currencies and intensifying inflationary pressures, the report said.
Despite those risks, the continent has entered the current period of uncertainty with stronger economic fundamentals than in previous crises. Macroeconomic reforms, improved fiscal positions, stronger commodity export revenues, resilient remittances and renewed access to international capital markets have provided buffers, according to Afreximbank.
The sovereign credit environment has also improved, with the report recording nine upgrade actions against one downgrade and six additional positive rating outlooks. However, Afreximbank cautioned that renewed access to international debt markets should not be confused with an across-the-board improvement in credit quality.
Currency markets remain mixed. The report said some African currencies gained against the dollar in August partly because of broad-based weakness in the US currency rather than improvements in domestic economic fundamentals. Ghana’s cedi, meanwhile, remained vulnerable to strong corporate demand for dollars, according to the report.
Afreximbank said the expansion of intra-African trade offers an important counterweight to the continent’s external vulnerabilities. The bank urged governments to accelerate implementation of the African Continental Free Trade Area by removing tariff and non-tariff barriers, improving customs procedures and investing in cross-border transport, digital trade and regional payment systems.
“Regional integration should increasingly be viewed not only as a trade policy objective, but as an economic-security strategy,” the report said in its recommendations.
The broader challenge for African governments will be converting economic growth into sustainable gains while managing higher borrowing costs, currency volatility and commodity shocks, Afreximbank said.
Countries with stronger reforms, improving external balances, diversified exports and deeper regional trade links are likely to be better positioned than highly indebted economies dependent on imported energy and repeated external refinancing, according to the report.
