African Development Bank Warns Middle‑East War Could Dampen Africa’s Growth Outlook
The African Development Bank (AfDB) has highlighted the ripple effects of the ongoing conflict in the Middle East on the continent’s economic trajectory in its African Economic Outlook 2026. The report, unveiled at the AfDB’s Annual Meetings held in Brazzaville on 12 May 2026, projects a slowdown in real GDP per‑capita growth and rising inflationary pressures across many African economies.
Growth Prospects Adjusted Downward
According to the AfDB’s forecasts, real GDP per‑capita growth is expected to slip to 1.9 % in 2026, down from 2.1 % in 2025, before edging up to 2.2 % in 2027. These figures fall short of the 3.5 % growth rate the bank deems necessary to foster inclusive development.
The impact, however, is uneven across regions:
- Central Africa: Anticipated to outperform, with growth rising to 3.8 % in 2026 (from 3.6 % in 2025) thanks to higher commodity prices, especially oil.
- East Africa: Projected to decelerate from 6.6 % in 2025 to 5.9 % in 2026, reflecting supply‑chain disruptions, higher energy and import costs, and heightened food‑security vulnerabilities linked to Middle‑East tensions.
- South and North Africa: Both regions are expected to see slower growth, with North Africa feeling the strongest pressure given its geographic proximity to the conflict.
- West Africa: The outlook remains broadly unchanged relative to the pre‑war baseline.
Inflation on the Rise
The AfDB warns that the war‑induced surge in global oil and gas prices is amplifying inflationary pressures throughout the continent. The bank forecasts an average inflation rate of 10.4 % for 2026, representing a 0.9 percentage‑point increase over the pre‑war estimate released in January 2026.
Currency depreciation exacerbates the situation: the AfDB notes that the currencies of 27 African countries have weakened against the U.S. dollar, making dollar‑denominated imports costlier and feeding further into domestic price levels.
Fiscal and External‑Account Implications
Higher oil prices threaten to widen fiscal deficits in net‑oil‑importing states, constraining their capacity to cushion low‑income households from rising energy costs. Concurrently, the AfDB expects the continent’s current‑account deficit to expand to 1.7 % of GDP in 2026 and 1.9 % of GDP in 2027, up from narrower gaps observed before the conflict.
Policy Recommendations from the AfDB
To mitigate these adverse trends, the AfDB advises African central banks to adopt a more restrictive monetary policy stance. Specific measures include:
- Gradual policy‑rate tightening to anchor inflation expectations.
- Enhanced liquidity management to curb excessive credit growth that could fuel price pressures.
- Coordination with fiscal authorities to ensure that monetary tightening does not undermine essential social spending.
The bank also stresses the importance of diversifying export bases, strengthening regional trade corridors, and investing in renewable energy to reduce susceptibility to external oil‑price shocks.
Conclusion
While certain African regions may benefit from higher commodity prices, the broader continent faces notable headwinds stemming from the Middle‑East conflict. The AfDB’s 2026 Outlook underscores the need for prudent macro‑economic management, targeted fiscal support for vulnerable populations, and structural reforms that enhance resilience to external shocks. Policymakers and development partners alike are urged to heed these warnings to safeguard Africa’s progress toward inclusive and sustainable growth.
