Uganda is raising funds for the 2.7-billion-euro project, which has already won ⁠backing from lenders including the World Bank and the African Development Bank (ADB). Citibank has been appointed to help ‌mobilise financing.

Construction ⁠of the ⁠railway, which began in 2024, is being carried out by Turkish ‌firm Yapi Merkezi.

Apart from financing the crucial infrastructure project, ⁠IsDB has already consolidated its position as one of the African country’s biggest sources of external financing and, as of the end of May 2026, had projects in the East African country worth USD 896.5 million, government data showed.

The 272-km (169-mile) line will ‌reportedly link landlocked Uganda to Kenya’s rail network, ⁠providing crucial access to the Indian Ocean port of Mombasa, through which the African nation imports most of its goods.

Apart from the key funding support from Uganda, it is preparing to issue its first sovereign sukuk, which will partly address the African country’s financing requirements for the construction of a standard-gauge railway (SGR) linking capital Kampala with the Kenyan border town of Malaba.

Talking about Kampala’s upcoming maiden sukuk issuance, it will finance 15% of the estimated 2.7-billion-euro (USD 3.16 billion) cost of the SGR. Export credit agencies, on the other hand, are expected to provide 60% of the project financing, while development finance institutions (IsDB, World Bank, and ADB) would contribute the remaining 25%.

A month back, Deputy Treasury Secretary Patrick Ocailap launched a regional investor roadshow across East African Community (EAC) member states, including Kenya and Tanzania, to build the anticipation ahead of the sukuk issuance. However, not many details have emerged about the size or launch date of the sukuk.

Ocailap said, “The roadshow was intended to test the market, determine pricing and build investor relationships to ensure the success of the operation.” A delegation including representatives from Yusra Sukuk, the lead arranger for the transaction, as well as representatives from Stanbic Bank Uganda and the Bank of Uganda, was reportedly present during the investor roadshow.

While the railway construction contract was awarded to China Harbour Engineering Company in 2015, under an arrangement requiring the contractor to secure financing from the Chinese government, repeated funding delays since the last decade forced the Ugandan government to cancel the contract in January 2023. Authorities later signed a new agreement in October 2024 with Yapi Merkezi to build the connectivity between Kampala and Malaba.

Kenyan President William Ruto in March 2026 inaugurated construction works on a new phase of Kenya’s SGR linking Naivasha to Kisumu, with a later extension planned towards the Ugandan border. The standard gauge railway network has been the lifeline when it comes to travelling between Mombasa and Nairobi and onwards to Naivasha since 2019.

Over the longer term, Kenya and Uganda aim to extend the rail corridor towards Rwanda, South Sudan and the Democratic Republic of the Congo as part of efforts to strengthen regional trade and logistics integration across East and Central Africa.

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Citing the combination of steady Moroccan improvement and slow South African decline, ADB stated, “While South Africa remains a continental industrial powerhouse, it continues to experience a steady decline in industrial competitiveness.”

Morocco scored higher than South Africa in most of the ADB’s metrics, including the manufacturing sector’s contribution to overall GDP, education levels of the population, gross capital formation, the level of foreign direct investment, the ease of doing business and various indicators of macroeconomic stability, such as inflation and total debt owed by the country.

Morocco was assigned a score of 0.8415, against South Africa’s 0.8396.

The ADB said, “South Africa’s 2024 score was its highest level since 2020, yet still below its pre-COVID performance of 0.8518.” While this reflects the significant impact of recent shocks, it also confirms a longer-term downward trend, with performance declining from 0.8819 in 2010 and reaching a low of 0.8301 in 2016.”

The top ten were completed by Egypt, Tunisia, Mauritius, Algeria, eSwatini, Senegal, Namibia, and Cote d’Ivoire.

While three Southern African countries were in the top ten, two other countries on the continent had seen significant declines. Lesotho, which was ranked as the 16th-most industrialised country in Africa in 2010, slipped to 26th in the ADB’s latest ranking, while Botswana, ranked 9th in 2010, got demoted as the 15th-most industrialised country on the continent.

While Morocco has emerged as Africa’s most industrialised economy, a strong agricultural rebound and sustained investment in major infrastructure projects are projected to help the country grow by 5% in 2026, up from an estimated 4.6% in 2025.

The Organisation for Economic Co-operation and Development (OECD), in its latest Economic Outlook, remarked, “GDP growth is projected to reach 5.0% in 2026 and 3.9% in 2027, after rising to 4.6% in 2025,” while noting Morocco’s resilience despite growing uncertainty in the global economy.

“Growth in 2025 was supported by private consumption and investment, benefiting from lower inflation, stronger consumer confidence, and major public infrastructure programmes,” OECD said.

The report further forecast a particularly strong recovery in agriculture after several years marked by drought conditions. The African country has benefitted from the heavy winter rainfall that has replenished reservoirs across its territory, supporting what the OECD estimates will be a 15% rebound in agricultural production during 2026 before conditions normalise in 2027.

At the same time, infrastructure spending is expected to continue boosting manufacturing and construction activity.

However, in order to remain a growth engine, the OECD suggests Morocco deal with the vulnerabilities to fluctuations in international energy markets due to its dependence on imported energy.

“Approximately 90% of Morocco’s energy needs are imported, making the country exposed to rising global prices and geopolitical tensions. The recent energy price shock is expected to temporarily increase both inflation and the current account deficit in 2026. Inflation, which averaged just 0.7% in 2025, is projected to rise to 3.2% in 2026 before easing again to 1.4% in 2027. Consumption growth is expected to moderate somewhat because of higher inflation but remain solid,” the OECD said.

However, the ongoing Iran war and the stalemate at the Strait of Hormuz have brought an opportunity for Morocco, as disruptions to fertiliser exports from competing producers could create short-term tailwinds for the African nation’s phosphate industry.

However, the OECD outlook also said, “A prolonged conflict could also disrupt supplies for domestic fertiliser production because Morocco depends on imports of ammonia and sulphur from Gulf economies.”

Talking about Morocco’s phosphate industry, fertilisers accounted for 21% of the country’s export revenues in 2025, helping offset some of the impact of higher energy import costs.

“Exports are expected to continue improving over the next two years, supported by stronger external demand and the country’s industrial expansion. However, the current account deficit is forecast to widen to 3.1% of GDP in 2026 and 3.3% in 2027 due to rising import prices. The labour market is also expected to improve gradually. After declining from 13.4% in 2024 to 13% in 2025, unemployment is projected to fall by a further 0.3 percentage points in 2026,” the OECD concluded.

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“The war has already triggered a trade shock, which could potentially and quickly turn into a cost-of-living crisis across Africa due to higher fuel and food prices, rising shipping and insurance costs, exchange rate pressure and tighter fiscal conditions. The extent of this impact would vary across the continent based on levels of import dependency, exposure to the Middle East and global market conditions,” the report noted, while predicting that the continent’s GDP may decline in 2026 by 0.2 percentage points if the conflict’s duration exceeds six months.

According to the study, food prices, in particular, are mainly felt by vulnerable African households, given that most countries are still growing at rates below pre-COVID levels.

“Thus, the longer the conflict lasts and the more severe the disruption to shipping routes and energy and fertiliser supplies, the greater the risk of a significant growth slowdown across the continent,” the report noted.

The Middle East reportedly accounts for nearly 16% of Africa’s imports and 10.9% of its exports. The Strait of Hormuz, the key waterway effectively shut by Iran (to gain geopolitical leverage in the conflict), usually handles a fifth of global oil exports and nearly 90% of Arabian Gulf oil exports.

“Continued escalation of the conflict worsens global instability, with serious implications for energy markets, food security and economic resilience, particularly in Africa, where economic pressures remain acute,” said Mahmoud Ali Youssouf, chairman of the African Union Commission.

“Food security is crucial to Africa, with an estimated population of more than 1.57 billion, as communities across the continent rely on agriculture for their livelihood. A lack of food security can lead to hunger, malnutrition and social instability,” says African Food Security, an agricultural development firm.

The main challenges in the continent’s food sector have been climate change, poor infrastructure, limited access to modern farming technology, political instability, land degradation and rapid population growth.

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