The World Bank has raised its 2026 growth forecast for sub-Saharan Africa to 4.3%, saying forecasts have been upgraded for nearly three-quarters of the region’s countries, while warning that inflation is set to rise and that growth is still too slow to create enough jobs.

Growth is projected to rise from 4.1% in 2025 to 4.3% this year, the Bank said on October 6 in the latest edition of its biannual Africa Economic Update.

That is up from the 4.1% the Bank forecast in April, when it cut the projection from 4.4%, citing risks including the conflict in the Middle East. The upgrade recovers most of that cut but leaves the forecast below where it stood a year ago.

The improvement is broad. Forecasts were raised for 35 of the region’s 47 countries, among them Angola, Ethiopia, Nigeria and Zambia, the report shows. Nigeria is projected to grow 4.3% in 2026, up from 4.0% in 2025, and 4.4% a year in 2027 and 2028. Zambia is forecast to grow 5.6% this year, up from 3.8%, and Angola 4.5%, up from 3.1%, while Ethiopia is expected to match last year’s 9.2%.

Growth is not picking up everywhere. It is projected to accelerate in 21 of the 47 economies; South Africa is forecast to grow 1.0%, against 1.1% in 2025, and Ghana to slow to 4.8% from 6.0%. By sub-region, Eastern and Southern Africa is projected to grow 4.1%, up from 3.7%, while Western and Central Africa holds steady at 4.5%. The East African Community is the fastest-growing bloc in its sub-region, with growth rising to 6.2% from 5.0% on the strength of Rwanda, Tanzania and Uganda.

The Bank said the outlook is supported by stronger domestic demand, improved macroeconomic resilience and investment linked to the global energy transition and digital technologies. The report attributes the upgrade to a mix of cyclical and structural factors: commodity-led recoveries, particularly among oil exporters, agricultural rebounds and reforms that are improving the business environment. It said the conflict in the Middle East has affected the region mainly through higher fuel, fertiliser and food costs, not through weaker external demand.

Andrew Dabalen, the Bank’s chief economist for Africa, said the gains reflected years of reforms and improved economic management.

“The next challenge is turning growth into more jobs and better opportunities,” Dabalen said.

On that count, the Bank said, growth remains insufficient to substantially reduce extreme poverty or to absorb the region’s rapidly growing labour force. Per capita income growth is projected to rise only to 1.8% this year from 1.6% in 2025, and to average 2.0% a year in 2027 and 2028, according to the report. The poverty rate, measured at $3 a day, is projected to slip only from 47.8% in 2026 to 47.1% in 2027, and the number of poor people is expected to keep rising.

Inflation, meanwhile, is set to pick up. The median rate in the region is projected to rise from 3.7% in 2025 to 5.5% in 2026 as higher global fuel, fertiliser and food prices reverse some recent gains. Brent crude averaged $120.4 a barrel in April, its highest since Russia’s invasion of Ukraine, after the closure of the Strait of Hormuz, the report says. The Bank expects median inflation to ease to about 4% by 2028.

Public finances remain constrained. Public debt has stabilised at a median of 57% of GDP, but the report says that masks a shift towards “a costlier and riskier debt profile”, with domestic borrowing the main source of government financing since 2021 and private creditors an increasingly important source of external financing. General government external debt nearly quadrupled between 2008 and 2024, to $473bn from $119bn.

Of the 32 countries with current debt assessments, 53% are at high risk of external debt distress or already in it, and 59% when domestic debt is included. High debt-service costs continue to limit spending on health, education and infrastructure, and development assistance is declining.

Risks remain tilted to the downside, the Bank said. Further geopolitical tensions could push commodity prices higher and intensify inflation, a potential El Niño event could disrupt agricultural production and worsen food insecurity, and tighter financing conditions would further constrain governments’ budgets. Dabalen also cited high interest rates in advanced economies, Reuters reported.

The report’s special section looks at artificial intelligence as one way of turning growth into jobs. Most countries are at an early stage of adoption, with activity concentrated in Kenya, Nigeria and South Africa, and the report lists deep gaps in the foundations: about 900mn Africans remain offline, and the continent has 18% of the world’s population but 0.6% of global data centre capacity and supplies about 2% of global AI training data.

The Bank said the region’s greatest opportunity lies in affordable, locally adapted applications that work on low bandwidth, in areas such as education, agriculture, health and finance, and not in frontier systems. Dabalen made the same point, saying Africa lacks the infrastructure and capital to compete with larger economies on AI but can still benefit from practical, low-cost applications on affordable devices, according to Reuters.

Estimates cited in the report suggest that, at current levels of readiness, AI would add 0.2 percentage point to GDP over the next 10 years, against a cumulative gain of as much as 4% with broader and faster adoption.

Realising those gains would require investment in reliable electricity, affordable connectivity, digital skills, data and computing infrastructure, the Bank said.