Africa’s economy is projected to grow by 4.1 per cent in 2026, but dependence on imported energy, shrinking development assistance and high borrowing costs threaten to limit the benefits of that expansion, according to a new United Nations trade and development report.
UNCTAD’s Trade and Development Report 2026: The Geoeconomics of Development forecasts that continental growth will ease from an estimated 4.4 per cent in 2025 before recovering slightly to 4.2 per cent in 2027. The outlook masks significant differences between countries and their ability to withstand external shocks.
The report warns that the changing organisation of global trade, finance and technology is making traditional development pathways less reliable. While international trade continues to expand, investment in strategic industries is concentrated in economies with the financial resources, technological capabilities and market influence to compete.
African countries are among the economies most exposed to imported energy costs. UNCTAD says disruptions linked to the Middle East conflict have affected oil and gas markets, with consequences for fertiliser, shipping and other essential inputs.
Higher fuel prices raise household expenses and business production costs, while governments with limited budget resources have less room to cushion the impact. In many low-income countries, debt-service obligations further constrain spending on essential infrastructure and protection against rising prices.
The report illustrates that exposure using 2023 trade data. Net imports of mineral fuels and related products were equivalent to 25.1 per cent of GDP in Cabo Verde, 16.1 per cent in Mauritania and 15.7 per cent in Liberia. The corresponding figures were 9.5 per cent in Djibouti and 9.2 per cent in Mauritius. These are historical indicators of import dependence, rather than estimates of this year’s energy bills.
Oil exporters outside the affected shipping routes, including Angola and Nigeria, may benefit from higher international prices. However, the report cautions that insufficient domestic refining capacity can reduce those gains when refined-fuel prices rise faster than crude prices.
Official development assistance is projected to fall by almost seven per cent globally in 2026, marking a third consecutive annual decline. UNCTAD also identifies a diversion of assistance away from developing regions since 2022.
The contraction comes as developing economies face more volatile international financing. The report says volatility in non-resident portfolio flows doubled in 2026, adding pressure particularly in frontier markets with limited financial buffers.
UNCTAD calls for stronger multilateral support and greater domestic development financing in local currency. It also proposes more predictable, multi-year pooled aid commitments to reduce recipients’ exposure to changing donor priorities.
Africa’s mineral resources offer opportunities, but the report warns that access to raw materials does not automatically translate into industrial development.
Developed economies capture around 70 per cent of global greenfield investment in strategic sectors such as semiconductors, artificial-intelligence infrastructure and energy-transition technologies. Developing economies lead in critical minerals, but face difficulties moving into higher-value activities.
A case study of the Democratic Republic of the Congo examines the challenges of turning its cobalt-production advantage into broader industrial capabilities. UNCTAD identifies ownership structures and market concentration as major obstacles to upgrading within global value chains.
The report argues that governments can shape investment more actively by promoting links with domestic suppliers, technology transfer, skills development and local value addition. Industrial policy should be assessed over decades, with financial policy supporting the gradual development of productive capacity.
UNCTAD identifies regionalism as one way African countries can strengthen their bargaining position, expand markets and support industries that individual national economies may struggle to sustain.
The report highlights the African Continental Free Trade Area as a mechanism linking market integration with diversification, regional production networks and poverty reduction. Citing a 2020 World Bank study, it notes that full implementation could raise regional income by seven per cent and lift 30 million people out of extreme poverty by 2035. Those figures are modelled potential gains, not outcomes already achieved.
However, lower tariffs alone will not be sufficient. Exporters also need support with standards, certification, customs procedures and documentation. The report warns that smaller firms can lose market access not because their products fail requirements, but because they cannot demonstrate compliance in the required form.
Renewable energy offers another opportunity to reduce vulnerability. UNCTAD presents the energy transition as a matter of economic security as well as climate policy, alongside regional cooperation in payments, technology and industrial development.
Its central warning is that resilience in global growth and trade should not be mistaken for broadly shared progress. For African economies, the challenge is to turn market access, investment and resource wealth into stronger domestic production and lasting improvements in living standards.
