Africa’s two largest economies are expected to remain on relatively firm ground this year even as growth slows across the rest of sub-Saharan Africa, according to the International Monetary Fund’s latest World Economic Outlook released on Wednesday.
The IMF projects Nigeria’s economy to grow by 4.1 per cent in 2026, unchanged from its April forecast, before accelerating to 4.3 per cent in 2027, while South Africa’s growth forecast was revised up slightly by 0.1 percentage point to 1.1 per cent, with expectations of a further pick-up to 1.3 per cent in 2027.
Regional Growth Masks Divergence
Sub-Saharan Africa’s economy is expected to grow by 4.3 per cent in 2026, broadly unchanged from earlier projections, but the IMF warned that the regional headline conceals widening differences among countries.
“While growth in Sub-Saharan Africa is expected to remain broadly stable, this masks substantial divergence across countries,” the report said, citing differences in policy space, reform implementation, and exposure to external shocks.
Growth in the rest of the region, excluding Nigeria and South Africa, is expected to slow to 5.2 per cent in both 2026 and 2027, down from 5.6 per cent in 2025.
Nigeria: Stability Amidst Rising Costs
The IMF said Nigeria’s outlook is supported by improved macroeconomic stability and favourable terms-of-trade effects, but the Fund issued a stark warning that higher prices for essential goods are expected to worsen poverty and food insecurity across the country.
The Nigerian economy’s 4.1 per cent projected growth places it ahead of the United States (2.3%), the United Kingdom (0.8%), and Germany (0.8%).
South Africa: Gradual Improvement
South Africa’s outlook is expected to remain stable in the near term and improve gradually as stronger policy frameworks and structural reforms support activity, yet at 1.1 per cent, the country’s projected growth rate remains well below the regional average of 4.3 per cent.
Global Context
The IMF revised its global growth forecast downward to 3.0 per cent for 2026 amid geopolitical conflicts, inflationary pressures, and uneven gains from technological advancement, and warned that much of sub-Saharan Africa remains largely outside the AI-driven global technology upswing while facing headwinds from falling official development assistance.
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