World Bank warns of slowing growth in Sub-Saharan Africa amid global uncertainty
Traders carry sacks of merchandise in Kampala.PHOTO/FILE
What you need to know:
- The report calls for governments to mobilize domestic revenues, prioritize spending on vulnerable populations, and improve business climates to stimulate job creation and productivity.
The World Bank has warned that the economic outlook for Sub-Saharan Africa (SSA), including Uganda, has worsened due to rising global trade barriers, policy uncertainty, and falling investor confidence.
In its Global Economic Prospects report released Tuesday in Washington, the Bank projected regional growth will reach 3.7 percent in 2025 and average 4.2 percent in 2026–27.
However, this is lower than earlier forecasts, and “remains insufficient to make substantial progress in reducing extreme poverty.”
“Sub-Saharan Africa is one of only two regions expected to see growth accelerate,” the report stated.
“Yet growth forecasts have been revised downward by 0.4 percentage point for 2025 and 0.2 percentage point for 2026,” the group noted
The Bank attributed the slowdown to weakening global commodity demand—an essential source of revenue for SSA exporters like Uganda—and said current global tariffs as of late May are expected to remain throughout the forecast period.
“The regional outlook also depends on a gradual easing of interest rates, which should support private consumption and investment. Nevertheless, high public debt and elevated borrowing costs require continued fiscal consolidation, which will constrain demand,” it noted.
In Uganda’s case, the Bank left its 2025 growth forecast unchanged at 6.2 percent, first projected in January. But as a commodity-exporting economy, Uganda may struggle with lower prices and demand.
Per capita income growth in SSA is projected to average 1.6 percent annually through 2027. For more than a quarter of SSA economies, incomes will still not have returned to pre-pandemic levels by then.
“Per capita income growth in SSA is expected to remain uneven, particularly among countries affected by violent conflict,” the report warned.
Global growth is also slowing. The World Bank projects a global expansion of just 2.3 percent in 2025, down nearly half a percentage point from earlier forecasts, and the weakest outside of recessions since 2008.
“Emerging-market and developing economies reaped the rewards of trade integration but now find themselves on the frontlines of a global trade conflict,” said Dr. M. Ayhan Kose, the Bank’s Deputy Chief Economist.
“The smartest way to respond is to redouble efforts on integration with new partners, advance pro-growth reforms, and shore up fiscal resilience to weather the storm,” he added.
The report calls for governments to mobilize domestic revenues, prioritize spending on vulnerable populations, and improve business climates to stimulate job creation and productivity.
