Looking ahead: Technology’s confluence, war’s crosscurrent
Global growth forecast, 2026
Sub-Saharan Africa growth forecast, 2026
Uganda growth forecast, FY2026/27
The year ahead is defined by the balance between two opposing global forces; an accelerating technology cycle pulling one way and a persistent conflict pulling the other. How that balance resolves will continue to shape the environment for global and regional markets and, through it, the portfolio.
The International Monetary Fund (IMF) projects global growth to ease to 3.0% in 2026 before recovering to 3.4% in 2027. It expects headline inflation to tick up to 4.7% in 2026 as the energy shock feeds through, prior to resuming its decline into 2027. That relatively constructive baseline, however, rests on the assumption that the Middle East conflict de-escalates by end-2026. Set against this downside is the countervailing pull of the technology cycle, whose momentum could lift global activity beyond expectations. The risk to this outlook is a persistent increase in inflation and risk premiums, which could impact rich valuations in global markets particularly artificial-intelligence assets. The outlook is therefore genuinely two-sided, turning on the interplay of conflict and innovation.
For Africa and East Africa, the near-term path hinges largely on energy prices. Both regions are projected to sustain robust growth and remain among the world's fastest-expanding regions. Sub-Saharan Africa is forecast to grow by around 4.3% in 2026 and the East African economies by 5% or more. Yet as a bloc of net energy importers, their inflation and external positions remain exposed to the conflict. Should energy prices stay elevated, imported inflation and financing pressures would build thus keeping regional central banks cautious and delaying the resumption of easing. A durable de-escalation, conversely, would allow disinflation to resume and monetary policy to turn supportive once more.
Uganda stands on the threshold of a structural shift. With commercial oil production expected to begin in FY2026/27, growth is projected to accelerate sharply. The IMF forecasts real GDP growth of around 9.4% as oil-related activity and continued infrastructure investment accelerates in FY2026/27. The principal risks lie in the external and fiscal accounts. Accordingly, persistently high energy and import costs would widen the current-account deficit and pressure the shilling. Furthermore, an elevated fiscal deficit and rising public debt underscore the importance of consolidation and a return to an IMF programme. Delivery on the oil-sector timeline, including the East African Crude Oil Pipeline, remains the most central to the medium-term outlook.
Taken together, the balance between an accelerating technology cycle and a persistent conflict will shape regional growth, interest rates, currencies, and equity markets over the coming year. These principal risk factors shall accordingly shape the performance of the portfolio over the near to medium term.
The section that follows examines how the year’s macroeconomic developments drove performance, and how the prevailing outlook will inform our investment strategy going forward.