AfDB Says Africa’s Growth Risks Were Already Tilted Lower

Africa’s growth outlook was already under strain before the Iran conflict began, with the African Development Bank saying on Monday that debt burdens, shrinking aid and global instability had tilted risks to the downside. Chief Economist Kevin Urama said the shock from the Middle Eastern conflict could be modest if it lasts less than three months, but a longer war would deepen the hit to African growth.

The bank kept its growth forecast at 4.3% for 2026 and 4.5% for 2027, but said mounting debt and fiscal pressure remained major headwinds. It said the continent’s public debt reached $1.9 trillion in 2024, with seven countries in debt distress and 13 others at high risk.

Urama said higher fuel, food and fertiliser prices were already affecting African economies, while about 29 countries had seen currency depreciation linked to the inflation shock. The AfDB said debt-service obligations were consuming more than 31% of government revenues, crowding out investment in health, education and infrastructure.

The report also warned that cuts in official development assistance threatened social programmes, with some countries relying on external funding for more than half of current health spending. It said foreign direct investment flows to Africa were already 42% lower in the first half of 2025, leaving the continent more exposed if global risk aversion deepens.

Oil-exporting African countries could benefit from higher prices caused by supply disruption, and domestic refinery capacity such as Nigeria’s Dangote refinery could help cushion some supply shocks. But the bank said the broader effect of the conflict was still likely to be negative for many economies because it raises import bills and worsens financial stress.

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