Africa's economic growth is expected to slow slightly to 4.2% this year from 4.4% last year, the African Development Bank (AfDB) said, as Middle East tensions push up fuel and food costs, before picking up again in 2027.

Despite last year's shocks from trade and geopolitical tensions, the 54-nation continent remained one of the world's fastest-growing regions alongside Asia, outpacing Europe and Latin America, the AfDB said in its annual outlook published on Tuesday.

Growth in 2025 was driven by higher farm output, improved macro-economic policies and higher commodity prices. Africa's biggest regional development bank said it expected growth next year to return to 4.4%, with forecasts based on the assumption that the Middle East shock will last for two-three months. 

"The impact of this shock on growth and macroeconomic stability will depend on the duration of the supply chain disruptions and their effects on global energy and fertiliser prices," said the report.

Here are more details from the bank's report:

East Africa, the continent’s fastest-growing region, is forecast to slow this year by more than half a percentage point as the crisis drives up energy and import costs and worsens food security risks.

The report was released at the bank's annual meeting in Brazzaville, the capital of the Republic of the Congo that is focusing on ways of harnessing regional capital pools to fund its development needs.

The AfDB meeting is usually a key fixture for policymakers and market participants debating Africa's development finance agenda - though there have been concerns by some potential attendees that the Ebola outbreak in neighbouring Democratic Republic of the Congo could overshadow the event.

AfDB and the host government, have reassured delegates that there are no cases in the country so far and authorities are conducting surveillance in line with World Health Organisation guidelines.

Sidi Ould Tah, who took over the bank's presidency last September, has made securing of development finance for the continent from its own savings under a plan known as NAFAD, a key plank of his presidency which started as overseas development aid started dwindling.

"Achieving sustained and inclusive growth will require a substantial increase in investment," Tah said in the report.

Tah said Africa must raise annual growth rate to more than 7% and sustain it for decades, in order to create the large number of jobs needed and cut poverty.