African economies are facing renewed pressure from rising geopolitical tensions, tighter global financial conditions and persistent inflation risks, even as some countries continue to show resilience through slowing inflation and expanding private wealth.
From widening trade finance gaps and renewed monetary tightening in South Africa to Zambia’s easing inflation and growing billionaire wealth, the continent’s economic outlook is increasingly being shaped by global conflicts, commodity price swings and shifting geopolitical alliances.
Africa’s trade finance gap widens to $86.6bn as Middle East tensions bite
The African Development Bank (AfDB) has warned that Africa’s trade finance gap could widen to $86.6 billion by 2027 as rising geopolitical tensions in the Middle East increase energy prices and tighten global credit conditions. According to the report, Trade Finance Supply in Africa: Post-COVID Trends and Emerging Opportunities, Africa’s unmet demand for trade finance ranged between $74 billion and $92 billion in 2024. The estimated $74 billion gap represented 5.4 percent of the continent’s total merchandise trade value last year.
Why it matters: The widening trade finance gap threatens Africa’s ability to expand intra-African trade, support industrialisation and fully benefit from the African Continental Free Trade Area (AfCFTA). Rising energy costs linked to Middle East tensions could further increase import bills and weaken already fragile external balances across several economies.
