The latest economic outlook report by the African Development Bank (AfDB) projects that the continent will grow at 4.2 per cent in 2026, slightly down from 4.4 per cent in 2025, before bouncing back to its growth trajectory in 2027. The downward revision for 2026 comes at the back of heightened geopolitical tensions and global supply chain disruptions mainly due to the Iran war in the Middle East. Still, Africa remains one of the world’s fastest-growing regions, with 22 countries projected to grow by more than 5 percent in 2025. East Africa, in particular, is expected to remain the continent’s fastest-growing region. Growth is projected at 5.9 per cent, although this represents a moderation from the 6.6 per cent recorded in 2025. Rising energy and import costs are partly to blame for the region’s slow growth. East Africa — including Rwanda, Tanzania, Uganda, Kenya, Burundi, Ethiopia, the Democratic Republic of the Congo (DRC), and Sudan, among others — remains largely a net importer of fuel and agricultural commodities. Yet the region is endowed with significant reserves of petroleum and other natural resources, including minerals. Collectively, East Africa is globally known for its vast reserves of gold, cobalt, graphite, gemstones, uranium, diamonds, wildlife, land, and marine resources. The challenge has been how to finance the extraction and processing of these resources. Mining, for example, remains one of the least financed sectors in many countries across the region. This has left the sector largely in the hands of multinational companies, which often export resources in raw form with little or no value addition. Across the continent, countries have frequently cited limited financing as a major barrier to funding their own development. According to AfDB, Africa faces an annual financing gap of more than $1.3 trillion if it is to meet the Sustainable Development Goals. The Bank attributes the deficit to low domestic resource mobilisation, weak financial intermediation and tightening external financing conditions. But that story is incomplete. Africa does not lack financial resources. A report by the Africa Finance Corporation last month found that Africa’s non-bank domestic capital pools exceeded $2 trillion by the end of 2025. In the same period, domestic institutional capital, pension, and insurance assets surpassed $1 trillion for the first time. Public development bank assets stand at $276 billion, and sovereign wealth funds at $164 billion, while central bank reserves increased from $480 billion in 2024 to $530 billion in 2025. This tells us that Africa’s own capital base has the scale to offset declining external financing provided it is effectively intermediated and channelled into the right development priorities.
