World Bank Upgrades Angola Growth, Mozambique Debt Risks Rise
The World Bank has raised its 2026 economic growth forecast for Angola to 4.5%, marking a significant acceleration for the oil-rich nation. However, the outlook for other Lusophone African countries is mixed, with Mozambique facing a sharp spike in inflation and ongoing debt distress, according to the October edition of the Africa’s Pulse report.
Angola Leads the Charge on Oil Momentum
Angola is experiencing one of the region’s most robust economic upturns. The World Bank revised its growth projection upward from 3.1% in 2025 to 4.5% this year. This surge follows a stellar second quarter where the Gross Domestic Product (GDP) grew by 8.74% year-on-year.
As a major oil exporter, Angola has remained resilient against global energy shocks triggered by Middle East conflicts. Rising crude prices have bolstered export revenues and foreign exchange inflows, stabilizing the kwanza and improving the current account balance. While inflation is expected to drop significantly—from 20.2% in 2025 to 10.3% this year—the World Bank cautioned that internal inflationary pressures could still erode household welfare.
Mozambique Grapples with Debt and Rising Prices
In contrast, Mozambique faces a more precarious path. The economy is expected to grow by a modest 0.6% this year, recovering slightly from a 0.2% contraction in 2025. However, inflation is projected to jump from 4.4% to 7.5%, placing Mozambique among the six African nations seeing the sharpest price increases.
The report reiterates that Mozambique remains in “debt distress.” Public debt is estimated to hit 94.6% of GDP by the end of 2026 and could exceed 100% next year. While a $700 million payment to the International Monetary Fund (IMF) in March unlocked discussions for a new aid program, a formal restructuring framework is still missing, forcing the government to manage domestic debt by issuing new securities.
Mixed Outlook for Other Lusophone Nations
The World Bank report also provided snapshots of other Portuguese-speaking economies in the region:
- Cabo Verde: Growth is expected to cool slightly to 5.3% from last year’s 6.3%. While the nation is vulnerable to energy price hikes, a steady flow of tourism and migrant remittances continues to support the economy.
- Guinea-Bissau: Growth is projected at 4.9%. Despite a slight slowdown, the country is noted for improving its primary balance through disciplined fiscal adjustments and better revenue collection.
- São Tomé and Príncipe: The economy remains sluggish with a projected growth of just 0.4%, down from 1.0% in 2025, while inflation persists at 11.0%.
Broader Regional Recovery
Overall, Sub-Saharan Africa is showing signs of recovery. The World Bank expects regional growth to reach 4.3% in 2026, up from 4.1% in 2025. Projections were revised upward for 35 of the 47 countries in the region, driven by improving conditions in major economies like Nigeria, Ethiopia, and Zambia alongside Angola.
2026 Economic Projections at a Glance
| Country | GDP Growth | Inflation |
|---|---|---|
| Angola | 4.5% | 10.3% |
| Cabo Verde | 5.3% | 2.4% |
| Guinea-Bissau | 4.9% | 2.0% |
| Mozambique | 0.6% | 7.5% |
| São Tomé and Príncipe | 0.4% | 11.0% |
| Equatorial Guinea | -1.2% | 2.7% |
Source: Africa’s Pulse, October 2026
Image: Pexels – Cardoso Lopes Lopes
