The World Bank has projected that Nigeria and Angola will gain economic advantages from rising energy prices caused by the Middle East conflict, even as most Sub-Saharan African economies face slower growth and increased inflation. In its Global Economic Prospects report released Thursday, the bank stated that higher oil prices would support oil-exporting nations like Nigeria and Angola, while straining countries dependent on fuel imports. Sub-Saharan Africa's growth is expected to decline slightly to 4.0 percent in 2026, down from 4.1 percent in 2025, with the forecast revised downward by 0.3 percentage points since January due to the conflict's negative regional impact.
The report indicated that non-oil-exporting economies would see reduced household spending and higher production costs as fuel, fertilizer, and transport prices rise. Some governments have taken limited steps to ease the burden: Ghana and Ethiopia have maintained or expanded fuel subsidies, Angola has postponed subsidy reforms, and Senegal has adjusted administered prices and transfer programs. Financial conditions across the region have tightened, with rising sovereign bond yields, weakening currencies, and stagnant stock markets following the conflict's outbreak.
Despite these challenges, parts of the region showed resilience in early 2026. Stronger commodity prices for precious metals, copper, and coffee boosted exports and revenues in some countries. Lower inflation and better agricultural output allowed central banks in several nations to ease monetary policy gradually. Structural reforms in Nigeria and Ethiopia, including exchange-rate liberalisation and improved public financial management, have strengthened investor confidence. In South Africa, improved energy availability supported economic activity. The extension of the African Growth and Opportunity Act by the United States through 2026 and China's removal of tariffs on all African imports are expected to aid regional trade integration, though the World Bank cautioned these measures would not fully offset the conflict's effects.
Growth forecasts for Nigeria and South Africa have been revised downward due to the Middle East conflict and ongoing structural issues. Industrial commodity exporters are expected to grow marginally from 3.1 percent in 2025 to 3.2 percent in 2026. The bank projects that regional growth will average 4.4 percent in 2027 and 2028 if geopolitical conditions improve, but real per capita GDP growth will remain low at 1.6 percent in 2026, rising to an average of 2 percent in the following two years.
Nigeria stands to gain from higher oil prices even as its growth forecast is downgraded, exposing the limits of relying on windfall gains amid structural weaknesses. The country's economic outlook remains tied to external shocks rather than sustained reform outcomes. Benefits from energy revenues will do little to close the gap in per capita growth, which stays below 2 percent through 2028. Without broader transformation, temporary gains will not alter the trajectory for most Nigerians.
Editorial note: AI-assisted opinion, not established fact. Full disclaimer →
