East Africa is projected to remain Africa’s fastest-growing region in 2026 and 2027 despite growing global uncertainty, according to the 2026 African Economic Outlook released by the African Development Bank Group (AfDB) during its Annual Meetings in Brazzaville on May 26.
The report projects East Africa’s economy to moderate to 5.9 percent in 2026, down from 6.6 percent before, then recover to 6.4 percent in 2027, with the continent’s economy projected to grow to 4.4 percent in 2027, up from 4.2 percent in 2026.
“Even after factoring in the impacts of the Middle East crisis, Africa’s real GDP growth is still projected at about 4 percent by the end of 2026, placing the continent among the best-performing regions globally alongside Asia,” AfDB Chief Economist Kevin Chika Urama said during the report presentation.
The East Africa region continues to outperform other parts of the continent, with North Africa projected at 4.2 percent in 2027, West Africa at 4.5 percent, Central Africa at 4.1 percent, and Southern Africa at 2.7 percent.
According to the report, 21 African countries are expected to record growth above 5 percent in 2027, indicating strong performance, while five countries, including Rwanda, could surpass 7 percent growth, indicating rapid growth above average.
In East African countries, continued benefits from strong service activity, infrastructure investment, and regional trade integration have supported growth momentum in recent years.
However, the report cautions that Africa’s macroeconomic environment remains mixed, with inflationary pressures, debt servicing costs, exchange rate volatility, and climate shocks continuing to pose risks to growth.
“While Africa remains one of the fastest-growing regions in the world, GDP per capita growth remains low, meaning growth is not yet translating sufficiently into jobs, productivity, and structural transformation,” Urama said.
Across Africa, consumer price inflation is projected to ease from 13.8 percent in 2025 to 10.4 percent in 2026, and then to 8.9 percent in 2027, signaling a gradual improvement in price stability after several years of elevated inflation across many economies.
The decline is attributed to increased agricultural output and the benefits of tight monetary policy in previous months. Even so, inflation in 2026 is projected to remain below 5 percent in 26 countries, including Rwanda. As of April 2026, currencies of 27 countries had depreciated against the US dollar relative to the baseline of 27 February.
The Bank warned that rising debt servicing obligations are tightening fiscal space across the continent, with debt service estimated at one-third of government revenue in 2024 in many African countries.
“Increasing commercial borrowing is making debt refinancing more expensive for many African countries, with debt servicing costs taking resources away from development financing,” Urama said.
Despite the challenges, the report argues that Africa still holds significant untapped financing potential through domestic revenue mobilization, institutional investors, diaspora financing, and stronger governance reforms.
“Africa’s development challenge is not a lack of resources, but how to mobilize and manage capital more efficiently. Improving governance, transparency, and public service delivery would be critical to rebuilding trust between governments and citizens,” Urama said.
