AfDB Cuts Africa Growth Forecast Over Middle East Crisis and Rising Costs

By Benadeta Mwaura - Reporter

Republic Of Congo, May 26, 2026 - The African Development Bank (AfDB) has projected a slowdown in Africa’s economic growth this year, warning that the ongoing crisis in the Middle East is increasing pressure on fuel prices, food costs, and supply chains across the continent.

In its latest economic outlook released during the bank’s annual meetings in Brazzaville, Congo, the AfDB said Africa’s economy is now expected to grow by 4.2 percent in 2026, down slightly from 4.4 percent recorded in 2025.

Despite the slowdown, the continental lender said Africa remains among the world’s fastest-growing regions alongside Asia, continuing to outperform Europe and Latin America in economic expansion.

The bank attributed last year’s stronger growth to improved agricultural output, better macroeconomic management, and stronger commodity prices across several African economies.

However, AfDB warned that escalating geopolitical tensions in the Middle East are now threatening to reverse some of those gains by disrupting trade routes and increasing global energy and fertiliser prices.

“The impact of this shock on growth and macroeconomic stability will depend on the duration of the supply chain disruptions,” the report stated.

According to the AfDB, East Africa, currently the continent’s fastest-growing region, is expected to experience one of the sharpest slowdowns as higher fuel and import costs strain economies and worsen food security risks.

The warning comes as many African countries continue grappling with high inflation, debt pressure, weakening currencies, and rising import bills linked to global energy markets.

Recent international forecasts have also pointed to worsening global economic uncertainty driven by the Middle East conflict.

The United Nations recently downgraded global growth projections to 2.5 percent, citing rising inflation, commodity price shocks, and trade disruptions linked to the crisis.

Similarly, the European Commission warned that prolonged instability in the Middle East could trigger another major energy shock, potentially pushing oil prices above $100 per barrel and slowing global growth further.

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The AfDB outlook was released amid growing concern over shrinking development financing for African countries following significant cuts in foreign aid from major Western economies.

At the Brazzaville meetings, AfDB President Sidi Ould Tah called for increased mobilisation of Africa’s domestic financial resources to bridge the continent’s widening development financing gap.

Tah is pushing a new framework known as the New African Financial Architecture for Development (NAFAD), aimed at unlocking Africa’s estimated trillions of dollars held in pension funds, sovereign wealth funds, and institutional savings.

“Achieving sustained and inclusive growth will require a substantial increase in investment,” Tah said in the report.

He added that Africa must sustain economic growth above seven percent for decades to create enough jobs for its rapidly growing population and significantly reduce poverty levels.

Economists say Africa’s growth outlook remains vulnerable to external shocks, particularly because many countries remain heavily dependent on imported fuel, fertilisers, and food supplies.

The AfDB noted that the continent’s recovery trajectory will largely depend on how long the Middle East conflict persists and whether global supply chain disruptions intensify further.

If tensions ease within the next few months, the bank expects Africa’s growth to rebound to 4.4 percent in 2027.

But prolonged instability, economists warn, could deepen inflationary pressure, weaken currencies, and increase fiscal strain across several African economies already struggling with debt repayments and limited fiscal space.