Fitch Projects Robust Growth in Africa in 2026 Despite AGOA Expiration Issues

Fitch predicts that the GDP of Sub-Saharan Africa will increase to 4.2% in 2026, as exporters face pressure from the expiration of AGOA.

According to a report by BMI, a Fitch Solutions Company, Nigeria and Africa face an urgent problem as the duty-free access window under the African Growth and Opportunity Act (AGOA) expires, especially for African garment exporters.

According to the paper, now that AGOA preferences have expired in September 2025, a number of nations will have to switch to Most-Favorable Nation (MFN) tariff schedules, which will increase their effective costs of access to the US market.

Protectionist tariffs from the Trump administration are another factor that has a significant negative impact on African economies that depend on textiles.

Fitch stated in the report titled “Sub-Saharan Africa Monthly Outlook: Regional Resilience Despite Global Uncertainties” that countries that export clothing may see more severe reductions in their shipments to the United States if AGOA is not renewed or re-engineered into a more flexible framework.

The paper stated that until governments diversify their trade policies or the implementation of the African Continental Free Trade Area (AfCFTA) picks up speed, African exporters would have little leeway and short-term demand restraints will continue, with a one-year extension improbable.

The macroeconomic outlook for the region as a whole seems to be improving despite these fundamental obstacles. This is particularly noticeable in Nigeria, where lowering inflation is already changing what people anticipate from the economy.

Following a period of high prices, currency reforms, and tight monetary policy, the Nigerian economy is expected to stabilize in the second half of 2025. 

Stronger gains in hydrocarbons and increased industrial output from the Dangote refinery helped real GDP growth, which had previously slowed owing to inflationary pressures and limited consumer demand, to creep up from 4.1% year-over-year in Q2 to 4.2% in Q3.

Nigeria will see a more significant upturn in 2026, according to BMI, as pricing pressures subside and domestic commerce and real estate—two industries formerly burdened by high inflation—stabilize. As households regain purchasing power, consumer spending, which had declined dramatically, is expected to rebound.

Nigeria’s inflation profile is directly linked to the improvement. By September, headline inflation had dropped to 14.6% from a peak of almost 24% in the start of 2025. According to BMI, inflation will average 14.2 percent in 2026, indicating that disinflation will persist long into that year.

It claimed that this change allows the Central Bank of Nigeria (CBN) considerable leeway to further loosen its monetary policy by cutting interest rates in order to boost household spending and credit expansion.

With reduced borrowing rates bolstering small firms, increasing access to finance, and revitalizing parts of the retail and service sectors that were choked by costly credit, the expected rate cuts might turn into one of the biggest tailwinds for Nigeria’s growth in 2026, it added.

In contrast to the volatility of prior years, the research stated that Nigeria is now in a more balanced and broad-based recovery thanks to rising consumer confidence and a macroeconomic situation that is progressively stabilizing.

However, there are still downside risks since, should reforms fail, structural issues including limited power supplies, worries about foreign exchange liquidity, and security pressures could still slow the rate of recovery.

However, BMI’s view is more optimistic, stating that as inflation declines and investment conditions improve, Nigeria’s medium-term fundamentals will get stronger.

In the region, the situation is similar; thanks to advancements in services and agriculture, Kenya is predicted to report somewhat stronger growth in 2026. As inflation declines and interest rates start to decline, confidence in Ghana’s financial markets is restored, according to the research.

Tanzania is still headed toward policy continuity, which should sustain investor interest over the medium run. Global commodity patterns and gradual energy reforms are expected to have a moderate positive impact on South Africa, despite its current muted status.

Together, they paint a more optimistic picture of Africa’s economic future in 2026. The instability of recent years has significantly subsided, as seen by faster regional development, easing monetary conditions, stabilizing inflation, and restored investment appetite.

Nigeria, Africa’s largest economy, may be poised for a multi-year rebound cycle, driven by flexible medium-sized markets and supported by strengthening fundamentals, if reforms continue to progress and global conditions stay generally positive.

It further stated that new projections for 2026 show a more optimistic turn for Africa’s economy, with a wide-ranging rebound throughout Sub-Saharan markets and a markedly better outlook for Nigeria as inflation starts to decline.

According to the most recent BMI predictions, regional growth momentum, which has been dampened over the past two years by both internal policy pressures and global shocks, will pick up speed, particularly among medium-sized African nations that are expected to outperform.

Real GDP in Sub-Saharan Africa, excluding Sudan, is expected to increase from 3.4% in 2024 to 3.9% in 2025 and a healthy 4.2% in 2026, according to the analysis.

According to the report, this would be the quickest acceleration the continent has experienced in more than ten years, boosting hopes that Africa will continue to be one of the most promising growth frontiers in the world.

The anticipated recovery of a number of medium-sized economies is a significant aspect of the projection for next year. It is anticipated that markets like Botswana, Zambia, and Mozambique will serve as anchors for the recovery, bolstered by increased investment flows, increased mining production, and steadily improving macroeconomic conditions. 

According to the paper, larger markets like South Africa, Nigeria, Kenya, and Ghana would also profit from the region-wide boost; but, the extent and speed of their recoveries will vary depending on internal factors.