Sub-Saharan Africa Faces Slower Growth as US-Iran War Raises Costs
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The World Bank lowered its growth forecast for Sub-Saharan Africa in 2026 to 4.1%, saying the fallout from the Iran war was slowing the region’s recovery. The lender said the new estimate is unchanged from 2025 but below the 4.4% it projected in October.
The bank said the war in the Middle East had pushed up fuel and fertilizer costs and threatened investment flows, while high debt burdens were already weighing on growth. It added that a two-week ceasefire between Washington and Tehran had not removed the risk of prolonged pressure on fuel prices.
World Bank chief economist for Africa Andrew Dabalen said the external environment had deteriorated sharply since late last year. He said rising energy and fertilizer prices, along with uncertainty around the scale and duration of the disruption, were making the outlook more difficult.
Dabalen said African governments had little room to respond because debt-servicing costs had doubled from 9% of revenues in 2017 to about 18% in 2025. He said about half of African countries were either at high risk of debt distress or already in it, leaving limited fiscal space for crisis response.
The strain is expected to hit oil-importing and financially vulnerable economies hardest, including Burundi, Malawi, Ethiopia, Kenya and Mozambique. The World Bank also warned that Gulf investment, remittances and fertilizer supply could all face pressure if the conflict continues.
