Africa’s catch-up with rich nations stalls as World Bank warns of “lost decade”

Africa’s efforts to narrow the income gap with advanced economies are at risk of stalling as weaker growth, rising debt burdens and recurring global shocks threaten to leave much of the developing world trapped in a “lost decade” of development, the World Bank has warned.

In its June 2026 Global Economic Prospects report released on Thursday, the Bank cut its global growth forecast for the year to 2.5 percent. It cautioned that the outlook could deteriorate further if disruptions from the Middle East conflict spread through energy markets and global financial systems.

The warning carries particular significance for Africa, where policymakers have spent much of the past five years battling inflation, currency weakness, rising debt burdens and sluggish investment.

“Barring a miracle, the 2020s will prove to be what their ominous opening foreshadowed: a lost decade—not just for a couple of outliers, but for dozens of developing economies,” said Indermit Gill, senior vice president and chief economist of the World Bank Group in the report.

Gill warned that nearly half of developing economies have failed to make progress on one of the most fundamental promises of development.

“Nearly one out of every two developing economies has failed since 2019 to advance on the most rudimentary promise of development: narrowing the income gap with the world’s most prosperous economies,” he added.

The assessment reinforces growing concerns that decades of economic convergence between poorer and richer nations are beginning to reverse.

According to the multilateral lender, developing economies excluding China and India are facing almost a full decade of lost convergence with advanced economy income levels. By 2027, per-capita GDP in high-income economies is expected to return to levels projected before the COVID-19 pandemic, while developing economies will remain about 6 percent below those expectations.

Growth engine weakens as shocks mount

The World Bank said the global economy is entering a prolonged period of weaker growth as geopolitical tensions, slowing trade, weak investment and rising debt weigh on economic activity.

Global growth is projected at 2.5 percent this year, marking the weakest performance outside a global recession in nearly two decades.

The institution noted that growth in developing economies has been steadily weakening for three decades, falling from an average of 5.9 percent in the 2000s to 5.1 percent in the 2010s and just 3.7 percent in the 2020s.

The decline mirrors a broader slowdown in global trade, which has fallen from average growth of 5.1 percent in the 2000s to 2.6 percent this decade.

For Africa, the challenge is compounded by repeated external shocks.

The continent has endured the economic fallout from the COVID-19 pandemic, the Russia-Ukraine war, elevated inflation, tighter global financial conditions and now renewed tensions in the Middle East.

The conflict, which began with United States and Israeli strikes on Iran on February 28 and has now stretched into a fourth month, has sent energy prices soaring following the closure of the Strait of Hormuz. The resulting supply shock has fueled inflationary pressures worldwide, increased expectations of tighter monetary policy and driven fertilizer prices sharply higher, raising fears of renewed stress on global food supplies.

The Bank warned that these pressures could undermine food security, inflation management and fiscal stability across many developing economies.

By the end of 2026, the institution expects one-quarter of developing economies, one-third of low-income economies and half of fragile and conflict-affected economies to remain poorer than they were before the pandemic.

“Government debt in developing economies has surged to all-time highs, meanwhile, and private investment growth in the 2020s has more than halved relative to the 2010s,” Gill noted.

The combination of rising debt and weak investment has become a growing concern for many African economies, where governments are already spending increasing shares of revenue on debt servicing.

Jobs and reforms key to avoiding stagnation

Despite the gloomy outlook, the World Bank said the next decade still presents an opportunity for developing economies to regain momentum if policymakers act decisively.

The institution identified three priorities: rebuilding trade relations, restoring fiscal discipline and accelerating job creation.

The jobs challenge is particularly important for Africa.

Sub-Saharan Africa’s working-age population is projected to increase by more than 600 million people by 2050, representing the largest expansion experienced by any region over a 25-year period.

Whether African economies can generate enough productive jobs for that workforce will play a critical role in determining future growth, stability and living standards.

The Bank urged governments to deepen trade integration, strengthen domestic revenue mobilisation, improve tax administration and invest more aggressively in productivity-enhancing sectors.

For Africa, initiatives such as the African Continental Free Trade Area, expanding digital payments systems and growing technology adoption offer potential pathways to stronger growth and greater resilience.

However, the institution cautioned that many low-income economies remain constrained by weak infrastructure, limited access to investment capital and rising fiscal pressures.

For now, the World Bank’s message is clear: the global economy may avoid recession, but slower growth is becoming entrenched.

Unless governments move quickly to revive investment, create jobs and strengthen economic resilience, Africa’s long-standing ambition of catching up with richer economies could remain out of reach well into the next decade.