Africa's growth risks tilted to downside even before Iran conflict: AfDB

The African Development Bank (AfDB) said Monday Africa's economic growth outlook was skewed to the downside even before the Iran conflict began as regional instability and global pressures cast a shadow over the continent.

The bank's Chief Economist Kevin Urama made the warning at the launch of the 2026 Africa Macroeconomic Performance and Outlook Report in Abidjan.

Despite the warning, the bank has maintained Africa's growth projections at 4.3% for 2026 and 4.5% for 2027, underpinned by private consumption, easing monetary conditions and improved external balances. 

But Urama cautioned that the scale of the impact will largely depend on how long the conflict lasts.

The bank has also flagged debt-service obligations, warning they are consuming more than 31% of government revenues across the continent, crowding out spending on health, education and infrastructure.

Ken Gichinga, Chief Economist at Mentoria Economics, says the consequences are already being felt.

"The debt distress is shaking the foundation of African economies," he said. "Not least right here in Kenya, where in the next one year there will be about three trillion coming due in terms of debt. What is being put forward as a solution is to push out those maturities using instruments such as bond switches to ease the pressure."

But he warns that buying time is not the same as solving the problem. "That heavy reliance on domestic debt can easily crowd out the private sector — and already we have seen it."

According to AfDB, the answer lies in bold policy action, deepening intra-African trade, diversifying exports and strengthening supply chains. But for now, the war is making that task significantly harder.