African economies are forecast to grow about 4.5% in 2026 and 2027, faster than the 3.1% and 3.4% global growth the IMF projects, according to estimates cited in a report from The Conversation.

The same analysis sets that optimism against a harder set of numbers: the World Bank has warned that African poverty levels in 2027 will be higher than in 2022, and UN Trade and Development (UNCTAD) reports that since 2010 the continent’s public debt has grown at roughly four times the rate of its GDP.

The report is by Danny Bradlow, who writes that he has worked on international development finance and African development for over 30 years and holds positions at the University of Pretoria and the Global Development Policy Center at Boston University.

His assessment is that Africa faces its most unpredictable and least friendly economic environment in decades, and he sets out six areas where countries could act.

Growth forecasts and the debt burden

The IMF attributes the growth outlook partly to macroeconomic reforms African governments undertook earlier this century, which the report says are helping them absorb shocks from the wars in Ukraine and the Gulf states.

Inflation and shortages of food and other critical supplies are among those shocks, set against optimism generated by an investment boom in artificial intelligence.

The fiscal picture is tighter. African governments spend an average of 12% of government revenue servicing debt, a share UNCTAD says exceeds what many of them spend on health or education.

Since 2010, average external debt has doubled as a share of exports and now equals 140% of exports.

About 45% of sub-Saharan Africa’s total debt is owed to private creditors, and the report says Africa is often charged more for financing than comparable countries in other regions.

Official development assistance fell 24% in 2025 from 2024 levels and is expected to fall further in 2026 and 2027, putting it at 2015 levels in real terms. The World Bank is the single largest creditor to sub-Saharan Africa.

The bank reported that its collaborations with the private sector leveraged US$35 billion in 2023 and US$112 billion in 2025, though its financing to developing countries has grown only about 1% a year in real terms since 2000.

The report also cites evidence that African countries will not raise the US$4.1 trillion needed by 2030 to meet their Sustainable Development Goal and climate needs.

Six proposals

Mobilise domestic capital. African pension funds, insurance companies and sovereign wealth funds hold a total of about US$4 trillion in assets, according to studies cited in the report, but only a small proportion is invested on the continent.

The recently established African Credit Rating Agency could play a role in promoting investment in African companies and developing national and regional capital markets.

Governments could support this by implementing their agreement to establish an African Financial Stability Mechanism, which would provide support to countries in financial crisis, and by closing loopholes that foreign and local investors use to avoid tax.

Use regional institutions better. AfreximBank, the Africa Finance Corporation and the Trade and Development Bank understand the African context and can support economic and financial integration, the report argues.

It notes that they do not always act as development banks: AfreximBank sued South Sudan in English courts for US$657 million owed under a loan agreement, and other entities fought with Ghana and Zambia over their contributions to those countries’ debt restructurings.

Member states should give clearer guidance on how these institutions promote sustainable development and regional integration.

Join the borrowers’ platform. The report proposes an African chapter of the recently created borrowers’ platform, an initiative to improve the bargaining position of sovereign borrowers in the global south.

It could serve as a forum for sharing information, peer learning and capacity development on debt management, and help borrowers diversify the sources and currencies they borrow in.

Push international tax reform. African states have played a leading role in promoting and negotiating the UN tax treaty, which is expected to be adopted and opened for signature in 2027.

The report says it should help African countries raise their fair share of tax from foreign actors in their economies.

Pursue reparations. Ghana and Caribbean states have raised the issue of reparations for slavery in global forums.

The UN General Assembly adopted a resolution declaring slavery the gravest crime against humanity, and the UK Privy Council is due to hear a case on the issue in 2027.

The report says this leaves space to think creatively about how companies and individuals, not only governments, can support reparations.

Press for IMF reform. African voices have called for fairer and more representative governance at the IMF and for more resources allocated on concessional terms to low-income countries in crisis.

Some also advocate better use of the IMF’s gold reserves to fund concessional financing facilities.

The fund holds gold worth about US$350 billion, and while legal constraints limit its ability to sell, the report says more active use of the asset is possible with creative thinking.

---

Source: The Conversation

---