However, the IMF expects growth to rebound to 4.2% in 2026, driven by stronger investment and improving global conditions.

The updated outlook comes as part of the IMF’s global economic update , which reflects weaker-than-expected international trade dynamics, including new U.S. tariffs and an increasingly uncertain geopolitical environment.

Despite the overall slowdown, several countries in the region are expected to remain strong performers. Senegal, Ethiopia , and Côte d’Ivoire are forecast to post the highest growth rates in sub-Saharan Africa this year, underpinned by infrastructure investment, services expansion, and relatively stable political environments.

Meanwhile, Africa’s oil-exporting nations are expected to grow slower, averaging 2.7%, as global oil demand shows signs of softening. Nigeria, the region’s largest oil producer, is projected to grow by 3%, though this marks a 0.2 percentage point downward revision from previous forecasts due to falling oil prices and demand concerns.

Equatorial Guinea is likely to face the steepest contraction, with its economy expected to shrink by 4.2% this year, reflecting structural weaknesses and declining hydrocarbon output.

In  South Africa , the continent’s most industrialised economy, growth remains subdued at 1%, held back by persistent power shortages, policy uncertainty, and weak private investment.

The IMF warned that political instability and conflict remain “pronounced” risks to the region’s economic outlook. Rising food and energy prices, in particular, continue to weigh heavily on vulnerable economies with limited fiscal flexibility.

“Rising food and energy prices have had a severe impact on vulnerable nations with limited fiscal space,” Semafor quotes.

The IMF further urged policymakers in the region to prioritise fiscal discipline, investment in human capital, and governance reforms to build resilience in the face of global shocks.

“The Committee found that Rwanda, Uganda and the United Republic of Tanzania fulfilled the criteria for graduation for the first time. These countries will be considered for graduation at the next triennial review in 2027,” the report said.

However, the report also noted that following recommendations for the graduation of Cambodia, Djibouti and Senegal, it found that those countries require a five-year preparatory period. While recommendations for Comoros and Myanmar had been deferred to the 2027 triennial review.

Angola, Zambia and Southeast Asian nation Timor-Leste no longer meet the graduation criteria and are thus not eligible for graduation, the report stated.

A country can graduate from the LDC category by meeting two of the three criteria (income, human assets, and economic and environmental vulnerability), or by having a per capita income of more than twice the income graduation threshold, at two consecutive triennial meetings of the CDP, according to the UN .

The three criteria are measured using key indicators which are; Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI).

No country satisfied all three criteria for inclusion in the list of least developed countries in 2024, the report notes.

The initial list of LDCs comprised 25 countries, additional countries have been added to the list since its inception in 1971, bringing the total to 45, comprising 33 African nations, 8 Asian nations, 3 from the Pacific and 1 in the Caribbean as of 2024.