African Economies Show Resilience Amid Global Tensions, PMI Data Reveals

Africa’s private sector began 2026 on a stronger note, with most economies showing resilience despite mounting global tensions. According to a BusinessDay analysis of Purchasing Managers’ Index (PMI) data from S&P Global, six out of eight African countries recorded expansion in business activity during the first quarter. This improvement comes even as geopolitical risks, particularly the United States–Israel–Iran conflict, continue to disrupt global markets and drive up costs.

The latest PMI figures highlight a steady recovery in business conditions across the continent, reflecting improved demand and output in several economies. As a key indicator of economic health, PMI readings above 50 signal expansion, while those below indicate contraction. The data suggests that Africa’s private sector is gradually regaining momentum, although rising energy prices and supply chain challenges are putting pressure on operating costs.

However, not all countries are benefiting equally from this recovery. Egypt and Ghana remained in contraction territory during the quarter, with Egypt posting the weakest performance. Businesses there faced declining demand and rising input costs linked to the Middle East conflict, leading to a drop in confidence about future activity. Ghana also lagged behind, with its PMI unchanged from last year despite easing inflation, pointing to a slower path to recovery.

On the brighter side, Uganda stood out as the continent’s top performer, driven by strong consumer demand, increased output, and growing employment. Businesses reported higher new orders and expanding inventories, signaling confidence in sustained growth. Analysts say Uganda’s performance reflects a supportive economic environment and improving purchasing power among consumers, even as firms pass rising costs on to customers.

Despite these encouraging signs, Africa’s economic recovery remains fragile and uneven. Countries like South Africa continue to struggle with weak demand and declining business activity, while broader risks such as inflation, global uncertainty, and structural challenges persist. Experts, including the World Bank, warn that although high-frequency indicators like PMI show improvement, the continent’s growth path will likely remain volatile in the face of ongoing external shocks.

source: Business day