African economies have managed to weather fairly well the energy crisis brought on by the Iran war, but a decline in aid has left the continent vulnerable to future shocks, the head of the International Monetary Fund’s Africa department said Thursday.

The IMF forecasts growth in Africa at 4.5% this year, slightly higher than its earlier estimate, recovering to 5% in 2027.

But development assistance for the continent fell sharply last year and is forecast to fall another 12% this year, Zeine Zeidane said at a meeting of the IMF and World Bank in Bangkok.

“That leaves the region with little room to absorb another shock. Renewed disruption to energy supplies, a sharp increase in global risk aversion, or a strong El Nino could all intensify pressures,” he told reporters.

‘Ability to adapt’

Persisting conflict and insecurity are other drags on the regional economy, posing a threat to food security in some regions.

“Overall risks remain firmly tilted to the downside and the challenges are significant, but so is the region’s ability to adapt and move forward,” Zeidane said.

Many African nations have enacted reforms to improve their economic resilience, and some are benefiting from surging prices for their exports of critical minerals used in advanced technologies such as artificial intelligence.

The IMF has urged those countries to use those windfalls wisely and adopt AI to improve their competitiveness.