Africa's economic recovery is expected to lose momentum in 2026 as the ongoing conflict in the Middle East drives up fuel, food and fertilizer prices, prompting fresh warnings from the International Monetary Fund, the World Bank and African finance leaders over slowing growth and rising investment risks.

The IMF said on Tuesday that Africa's growth is projected to slow from 4.5 percent in 2025 to 4.2 percent in 2026, with Sub-Saharan Africa's expansion easing to 4.3 percent as the fallout from the conflict weighs on trade, inflation and fiscal stability.

"Growth momentum in Africa is expected to slow down in 2026 contrary to earlier projections," the IMF and the African Consultative Group said in a joint statement issued after a meeting on Tuesday in Washington.

They added that the economic outlook in the region remains fragile as rising debt-service costs, limited access to affordable financing and mounting development needs continue to constrain governments' policy options, particularly in low-income and conflict-affected countries.

"The war has further complicated the situation, with risks of lasting economic scarring driven by renewed inflation, food shortages and growing social tensions," read the statement.

The African Consultative Group agreed that policymakers must focus on addressing the shock in the near-term while building resilience over the medium-term. Near-term priorities should include keeping inflation expectations anchored and protecting the most vulnerable through targeted, time-bound support.

Speaking during a media briefing on Tuesday, Pierre-Olivier Gourinchas, director of the IMF's research department, said the region is already seeing a downgrade in growth alongside rising inflationary pressure.

"We are seeing some downgrade of growth, and we are seeing some uptick in inflation in a number of countries in the region," he said, noting that the impact varies between energy-importing and energy-exporting countries.

The World Bank also warned that Sub-Saharan Africa's recovery from a decade of global shocks is showing signs of stalling, with its 2026 growth forecast revised down by 0.3 percentage points to 4.1 percent.

According to the lender, rising fuel, food and fertilizer prices linked to the Middle East conflict are expected to push inflation across the region to 4.8 percent in 2026, up from 3.7 percent in 2025, disproportionately affecting poor households.

"In the short term, governments should target scarce resources to protect the most vulnerable households," Andrew Dabalen, World Bank Group chief economist for the Africa region, said.

"At the same time, maintaining macroeconomic stability — by controlling inflation and exercising prudent fiscal management — will be essential to navigate the current shock and position African countries for a faster recovery once the crisis subsides," he added.

Beyond inflation and growth concerns, the crisis is also beginning to threaten capital flows into the continent. The World Bank said more than $100 billion in investment commitments from Gulf countries to Sub-Saharan Africa could face delays or scaling back as sovereign wealth funds reassess exposure amid heightened geopolitical uncertainty.

These investments, largely from the United Arab Emirates, Saudi Arabia and Qatar, have been directed toward renewable energy, ports, logistics, mining and large-scale agriculture projects according to the World Bank.

IMF officials also said higher oil and fertilizer prices, coupled with tighter financial conditions and declining foreign aid, are creating additional pressure for low-income African countries already grappling with high debt burdens.

Additionally, African finance ministers and IMF management urged governments to focus on protecting vulnerable households in the short term while accelerating reforms aimed at diversification, regional integration and infrastructure development to strengthen resilience against external shocks.