Africa: Trends to watch in 2025

As we approach the end of 2024, Africa Practice has considered the key trends to scrutinise and analyse in 2025, transcending geopolitics, climate, the economy, as well as elections and security. We also revisit some of the predictions we made last year and forecast the key dynamics to watch in the year ahead.

Geopolitics, climate change and the energy transition

1. African agency reaches new heights

2024 represented a high-water mark for African agency, as states leveraged geopolitical tensions to bolster their standing and secure representation in new fora. Despite – or perhaps because of – the outcome of the US election, we expect African governments to exercise even greater influence in 2025, including at the BRICS and the G20 under the South African presidency. 

The re-election of Donald Trump as US president in November 2024 looks set to usher in another era of American isolationism, accompanied by trade tariffs and cuts to funding for development and multilateral agencies. As Donald Kaberuka, former President of the African Development Bank, has argued “Africa and Europe should not sit around working out the implications of Trump 2.0 for their respective continents – rather they should see it as a moment of clarity and press ahead with their international reform agenda.” In 2025, we expect African leaders to diversify their international alliances in order to minimise the fallout.

Progress is already in motion at the BRICS, which welcomed new joiners Ethiopia and Egypt, along with Iran, Saudi Arabia and the United Arab Emirates in January 2024. This year’s BRICS summit saw hosts Russia eager to decouple global trade from the US dollar and promote greater trade in local currencies, with ramifications for Africa’s own currency conundrum (as we explore below). Over the coming year, we expect Russia to seek to promote greater trade in commodities among the BRICS nations by establishing dedicated exchanges for grain and precious metals, in a bid to evade Western sanctions. These measures could draw Egypt and Ethiopia closer to the alliance, as Cairo seeks access to discounted wheat and maize, and Addis Ababa spies opportunities to cut its food import bill in an attempt to conserve scarce forex. The opportunity may be less compelling for South Africa, where the Kremlin-hostile Democratic Alliance leads the agriculture ministry, and local gold and palladium producers have historically competed with Russian counterparts. Nevertheless, such enhanced South-South collaboration is likely to appeal to Nigeria, Uganda and Algeria, all of which received official invites to join as “partner states” at the BRICS summit in 2024. 

South Africa, meanwhile, assumed the year-long G20 Presidency in December 2024, under the theme “Fostering Solidarity, Equality, and Sustainable Development”. It becomes the third BRICS member in a row to hold the position, following Brazil in 2024 and India in 2023. South Africa looks to pick up where its bloc colleagues left off, advancing dialogue on inclusive growth, food security, climate change and the energy transition, and the reform of multilateral institutions, including the international financial architecture. With the African Union having been admitted as a member of the G20 forum in 2023, South Africa’s presidency provides an opportunity to further amplify the continent’s development priorities on a global stage. Look out for some major announcements at the concluding summit in late November 2025.

2. Climate summitry delivers small sums but big hopes

Last year, we noted the Global North’s tendency to over-promise and under-deliver on climate finance. In the eyes of African negotiators at COP29, the Global North has now under-promised with its USD 300 billion annual goal for climate finance to developing countries. While progress to raise this sum is likely to be slow, the agreement of regulation governing carbon markets provides cause for optimism among African issuers hoping to raise funds in 2025.

On 24 November in Baku, COP29 negotiators agreed on a New Collective Quantified Goal (NCQG) for climate finance for developing countries of at least USD 300 million per year by 2035 – up from the USD 100 billion target, which was set in 2009 and eventually realised, albeit behind schedule. The USD 300 billion target is set to be mobilised using a range of funding mechanisms, including grants, guarantees, forex risk instruments, and “first-loss” loans aimed to facilitate private sector investment. However, the sum falls short of the USD 1.3 trillion annual commitments sought by the G77 and China group, which comprises many African countries and is chaired by Ugandan diplomat Adonia Ayebare, who has characterised the figure as “embarrassing”. The NCQG also falls far short of estimates by the Independent High-Level Expert Group on Climate Finance, which calculates that by 2030, at least USD 2.3 trillion would be required annually to finance climate action in emerging markets excluding China. The NCQG will be revisited in five years, but debates look set to rumble on throughout 2025, reaching a crescendo at COP30 next November, given the Brazilian presidency’s commitments to boosting climate finance. Industry experts have also raised doubts as to whether the new pledge would be fulfilled, given past experience of advanced economies missing climate financing targets. With most advanced economies facing elevated fiscal pressures and a climate change sceptic in the White House, African countries are likely to face deep reluctance from the Global North to scale up climate finance in 2025.

Although bitterly disappointed by NCQG negotiations, African policymakers have reason for optimism with the development of carbon market regulation at COP29. On the first day of the summit, negotiators approved methodologies for Article 6 of the Paris Agreement, which underpins the trading of carbon credits. These steps will enable credits to be traded under a mechanism overseen by the UN Framework Convention on Climate Change, and will also allow trade between countries or under multilateral agreements. Regulatory progress is seen as a potential fiscal boon for many African countries that want to monetise their natural capital. The UN Economic Commission for Africa has estimated that if the carbon price were to reach USD 80 per tonne, 110-190 million jobs could be created in Africa. Trading between countries under Article 6 is likely to greatly increase demand for carbon credits, as polluting countries invest in carbon credits to offset pollution as part of their Nationally Determined Contributions (NDCs). However, civil society organisations have expressed concern that the agreement is not sufficiently robust, and that credits which are ineffective in stopping CO₂ emissions could be issued and traded under the scheme, undermining the value of the initiative. The credibility of the carbon market remains a key factor, based on the experience of the voluntary carbon markets, where some carbon credits lost more than half of their value this time last year.

3. South Africa grapples with CBAM as Kenya develops its carbon market 

In 2024, African economies accelerated efforts to adapt to shifting global trade and climate regulations, responding to the threat posed by the EU’s Carbon Border Adjustment Mechanism (CBAM), which mandates reporting obligations from 2026. Over the next year, we expect to see increased momentum in implementing mitigation strategies and regional carbon market integration. 

Although CBAM’s full effects will only be felt after its implementation in 2026, South Africa, the continent’s most industrialised economy, is already positioning itself to address future challenges. With its heavy reliance on coal-based energy, exports such as steel, aluminium, and automotive components are particularly vulnerable, potentially reducing EU-bound exports by up to 2.13% and impacting the country’s GDP by 0.62%. In 2025, we anticipate a combination of localised and diplomatic efforts. At the domestic level, this will entail initiatives such as South Africa’s CBAM Industry Working Group, which seeks to align industry around mitigation measures. On the international front, it is likely to include a legal challenge at the World Trade Organisation (WTO), which could be complicated by the dysfunction of the WTO’s Appellate Body. This will likely push South Africa to negotiate with EU counterparts to redirect CBAM revenues towards Just Energy Transition projects while also seeking to secure more favourable conditions for South Africa’s manufacturing sector.

In 2024, African nations intensified efforts to develop carbon markets in response to evolving global climate policies. Kenya enacted the Climate Change (Carbon Markets) Regulations, designating the National Environment Management Authority (NEMA) as the national authority to oversee carbon projects and climate obligations. In turn, NEMA initiated the development of a National Carbon Market Registry. Additionally, the African Carbon Markets Initiative (ACMI) launched country activation plans to expand carbon credit systems and enhance regional coordination. In 2025, we expect Kenya to operationalise the registry and establish mechanisms for direct certification and trading of carbon credits, reducing reliance on brokers. Additionally, bilateral climate agreements, such as Kenya’s anticipated internationally transferred mitigation outcomes (ITMO) deals with Switzerland, Japan and Singapore, will likely advance, enabling government-to-government carbon credit exchanges and laying the groundwork for a local secondary market for voluntary carbon credits.

4. Critical mineral financing gathers pace, bolstering African mining

In 2024, we predicted an increase in green mineral processing on the continent, driven by African governments’ desire to maximise the benefits of the extractive industries, and their ability to capitalise on strong renewable power fundamentals. While persistently high interest rates and negative climate impacts have sapped momentum, we expect mineral rich states to recruit new partners from the Gulf to support their value addition goals in 2025.

Western actors are finally getting serious about derisking African mining beneficiation projects. Over the past 18 months, the USA, Australia, Canada, Japan, South Korea, the EU and the UK have leveraged the Minerals Security Partnership (MSP) to diversify critical minerals supply chains by promoting investment in extraction, processing, refining, and recycling. In September 2024, DRC, Zambia and Namibia participated in the first in-person MSP Forum, forging relationships with Western governments, development banks and export credit agencies. A new MSP Finance Network is coordinating investment in 32 critical minerals projects, in a move that promises to strengthen environmental, social and governance standards across the extractive industries, while broadening the pool of potential investors for African mining projects. Although a Trump presidency is likely to prompt stakeholder and policy changes at the US International Development Finance Corporation, the agency is unlikely to backtrack on commitments to finance and insure the Kabanga Nickel project in Tanzania. This promises to extract high-grade nickel sulphide deposits at Kabanga, and process them at a new nickel refinery at the Kahama Special Economic Zone (SEZ), producing low-emissions nickel sulphate and creating jobs and industrial linkages. 

African governments are also adopting a more pragmatic approach when engaging with deep-pocketed partners with the ability to quickly turnaround ailing mines and develop new projects at scale. In 2025, Saudi Arabia and the United Arab Emirates (UAE) are set to become increasingly important investors in Africa’s mining sector, deploying capital to offset Chinese dominance in critical minerals, develop alternative sources of supply, and act as a bridge to Western markets. Saudi Arabia has pledged to invest USD 10 billion in African mining projects, and state mining company Ma’aden and the Saudi Public Investment Fund have established Manara Minerals as a dedicated joint venture for the purpose. Meanwhile, the UAE’s International Holding Company (IHC) is using its International Resources Holding (IRH) subsidiary to expand on the continent. In March 2024, IRH entered Zambia with the acquisition of a 51% stake in Mopani Copper Mines from Zambia’s state-owned mining company, ZCCM Investments Holdings, for USD 1.1 billion. In 2025, we expect IRH to acquire a stake in another strategically important mine, such as Konkola Copper Mines (KCM), operated by India’s Vedanta. 

Economy and business

5. US protectionism prompts Africa to revisit regional trade ties and look to Europe

In 2024, African economies became ever more integrated in global trade, with Kenya progressing towards a trade deal with the USA. However, the continent remains vulnerable to externalities, including an impending American pivot towards protectionism, which threatens to complicate efforts to renew the African Growth and Opportunity Act (AGOA) beyond 2025. African governments are unlikely to let the crisis go to waste, revisiting existing trade agreements.

Trump’s focus on domestic manufacturing and tariff increases will likely curb demand for African exports, threatening industries relying on the AGOA for duty-free access to US markets. With AGOA set to expire in September 2025, uncertainty around its renewal will likely hamper investment in sectors such as textiles, agriculture and the automotive industry. However, Africa is unlikely to be the focus of Trump’s ire, given the modest American trade deficit with sub-Saharan Africa, estimated at USD 11 billion. While we expect AGOA to be rolled over, this is unlikely to be a priority for the Trump administration or a Republican-controlled Congress, resulting in prolonged uncertainty. As witnessed with earlier attempts to punish South Africa for its hostility to Israel and sympathy for Russia, AGOA remains vulnerable to being captured by partisan interests seeking to score (geo-)political points. At the same time, a Trump presidency heightens the prospect of legislation prioritising US strategic interests at the expense of African economic development.

Under a deal-making American president, we expect bilateral trade agreements to become increasingly important. When Trump was last in office, Kenya pursued a Comprehensive Free Trade Agreement, which was downgraded to a Strategic Trade and Investment Partnership under the Biden administration, reducing the scope for tariff reductions. However, despite Trump’s preference for bilateral trade deals, the intricate and generally long-term nature of free trade agreement negotiations will push Kenya to find alternative solutions. This might entail a combination of strengthening regional trade via the African Continental Free Trade Area (AfCFTA) and relying on existing trade agreements, such as the EU-Kenya Economic Partnership Agreement (EPA), which entered into force in July 2024. Such a framework allows Kenya to develop regional value chains with other East African nations, such as Uganda and Tanzania, to enhance regional value chains in key sectors like agriculture and textiles. For example, Uganda’s surplus of raw cotton could complement Kenya’s textile manufacturing capabilities, creating higher-value products for both regional and international markets. Subject to rules of origin, such a move would enhance Kenya’s competitiveness in exporting its processed and manufactured goods to the EU – its largest export market and second-largest trading partner.

6. A continental payment system emerges, as CBDCs become increasingly urgent

In 2024, Africa continued to lay critical groundwork to reduce its reliance on foreign currencies, with different regions adopting competing payment systems and nations exploring advanced digital currency frameworks. In 2025, we expect to see growing overlap between different payment solutions, as well as continental engagement with the BRICS-backed mBridge platform, which promises to expedite de-dollarisation globally.

Intra-African trade has historically required access to hard currency, which eats into scarce forex reserves and necessitates clearing at international banks, costing African businesses an estimated USD 5 billion annually. Efforts to improve cross-border trade through local currency transactions have spawned a series of competing payment solutions. Anglophone West Africa was the first to adopt the Pan-African Payment and Settlement System (PAPSS), which is now being mainstreamed across the continent, placing it at odds with the Central African model, GIMACPAY, and the SADC- and COMESA-backed Transactions Cleared On An Immediate Basis (TCIB). Overlap between these different payment systems has complicated efforts to promote alignment with national regulation and the adoption of operating frameworks, as well as delaying investment in the robust technological infrastructure needed to scale systems. However, once a dominant model becomes mainstream, or cross-regional interoperability is achieved, digital payments promise to cut the cost of intra-African trade and provide governments with efficient alternatives to costly dollar-dominated systems. 

Simultaneously, Africa is preparing to leverage the transformative potential of Central Bank Digital Currencies (CBDCs) and align with global initiatives such as mBridge – a CBDC platform developed by Hong Kong, China, Thailand, the UAE, Saudi Arabia, and the Bank for International Settlements. As geopolitical tensions escalate under a Trump presidency, BRICS nations are likely to turn to mBridge to de-dollarise global trade and to insulate themselves from sanctions risks. In turn, African economies will likely explore CBDCs as tools to bypass traditional banking systems and diversify trade partnerships. South Africa has already experimented with a wholesale CBDC for financial institutions to use for interbank transfers and explored the feasibility of a retail CBDC. We expect BRICS momentum to reinvigorate these debates. Equally, alignment between CBDCs, such as Nigeria’s e-Naira and mBridge, designed to facilitate real-time multi-CBDC transactions, would enable African countries to participate in a reformed global financial architecture. 

7. Debt restructuring delays force G20 to revisit Common Framework

Last year, we lamented protracted debt restructuring negotiations in Zambia, predicted that the future of the G20’s Common Framework for Debt Treatments would hinge on success in Ghana, raised concerns around debt servicing amid persistently high interest rates in Kenya, and forecast sovereign default in Ethiopia. 2024 saw some breakthroughs, with Zambia securing an agreement with creditors after four years of talks, and Ghana sealing a deal with bondholders in half that time. However, Ethiopia remains in limbo, while Kenya has paid dearly to refinance its debt. In 2025, Africa will continue to contend with elevated borrowing costs, while calls for reform of the international financial architecture are set to grow louder. 

Kenya was a poster child for Africa’s vulnerability to high borrowing costs this year, when the treasury bought back the bulk of its maiden USD 2 billion Eurobond in February, ahead of the debt maturing in June. In a textbook example of “extend and pretend”, Kenya paid a 10.375% coupon to access USD 1.5 billion on a seven-year term – a colossal leap from the 5.875% and ​​6.875% interest rate Nairobi paid in June 2014. This was far from an isolated case. African sovereigns must contend with punitive interest rates due to entrenched perceptions that governments are risky borrowers – contrary to evidence that continental default rates are lower than those of other regions. We estimate that African governments pay a “prejudice premium” worth USD 4.2 billion of additional debt interest payments every year, driven by adverse media sentiment, which causes bond yields to spike, translating into heightened borrowing costs. In 2025, we expect to see greater awareness of the damage done by media stereotypes, and hope for more responsible reporting.

Although Ghana’s outgoing government successfully negotiated a deal with bondholders under the G20’s Common Framework, fiscal discipline has slipped ahead of elections, and the next government looks likely to question the terms of its IMF agreement, as it seeks to dodge painful reforms. Under a South African G20 presidency, we anticipate renewed scrutiny of the international financial architecture, including the role of multilateral lenders. When the G20 introduced the Common Framework amid the COVID-19 pandemic, the IMF and World Bank argued that their concessional borrowing model hinged on continued repayments – even by members seeking to restructure their debts. Now economists worry that this model results in too much “leakage”, with concessional lenders bankrolling payments to private creditors, leaving insufficient funds for indebted governments. Accordingly, leading economists are debating two competing debt relief plans. The Finance for Development Lab advocates for temporary extensions of maturities for countries facing liquidity problems. Meanwhile, the Debt Relief for Green and Inclusive Recovery group calls for the IMF and World Bank to accept haircuts on their lending programmes and inject new capital; while private lenders swap outstanding debts for new tradable instruments. We expect these debates to gather pace as 2025 progresses, culminating in fireworks at the G20 summit in late November.

Elections 

8. Emerging democracies vote, while Gabon returns to civilian rule 

2024 was a seismic year for African democracy, with over a dozen countries holding elections, and watershed ballots in Senegal, South Africa, Botswana and Ghana. By contrast, 2025 promises to be more stable, with key races limited to Côte d’Ivoire and Tanzania, and a promising transition afoot in Gabon.

In Côte d’Ivoire, President Alassane Ouattara must decide whether to seek a fourth mandate, sustaining the Ivorian growth story, or to stand aside and allow a new generation to take over. Ouattara’s last attempt at naming a dauphin was scuppered by the death of two handpicked successors in 2020. He has since made peace with his predecessor, Laurent Gbagbo, who sought to block Ouattara from assuming office in 2010-11 and was tried at the International Criminal Court for his role in the post-election crisis. Ouattara’s other main opponent, Henri Konan Bédié, died last year, enabling his party to rally around a new leader in the form of international banker Tidjane Thiam. Meanwhile, Ouattara’s Rally of Houphouëtists for Democracy and Peace (RHDP) seems intent on him standing for a fourth term. Now in his 80s, Ouattara will need to decide his – and Côte d’Ivoire’s – political future ahead of elections in October 2025.

In Tanzania, President Samia Suluhu Hassan will be looking to secure an elected mandate, having inherited power upon the abrupt death of her predecessor, John Magufuli, in 2021. However, this hinges on her securing the nomination of Tanzania’s ruling party, Chama Cha Mapinduzi (CCM), which has effectively been in power since independence. While Suluhu initially sought to promote Tanzania as open to foreign investment, the country has taken an authoritarian turn as she has sought to win over securocrats and Magufuli acolytes, while maintaining his ambitious infrastructure building programme. Allegations of rigging and intimidation at local elections in November 2024 augur poorly for competitive presidential and legislative polls in October 2025, with the intelligence and security forces poised to crackdown on any threat to CCM rule. 

Finally, Gabon is set to hold transitional elections, restoring constitutional rule two years after the August 2023 coup that deposed Ali Bongo and the Gabonese Democratic Party (PDG). Unlike its counterparts, the Gabonese junta has moved quickly, drawing up a new constitution which enables members of the transitional government, including Interim President General Brice Oligui Nguema, to participate in elections, while blocking the Bongo dynasty, members of the PDG and naturalised citizens. With the opposition divided, we expect Oligui to take leave from the army, stand as a civilian, and secure election as president in August 2025. Western donors are likely to turn a blind eye to any electoral chicanery, given American and French efforts to avoid a Chinese military training facility in Gabon at all cost. Oligui would govern with few checks on his authority, as the new constitution eliminates the post of prime minister, concentrating executive power in the hands of the president. 

9. Pariahs in the Sahel unite, while Guinea evades scrutiny over missed deadlines

As we predicted last year, the Sahelian juntas of Burkina Faso, Mali and Niger became increasingly isolated from their West African peers in 2024, while the Guinean military regime slowly advanced its transition to civilian rule. The year ahead promises to see the Sahelian juntas formally break ties with the Economic Community of West African States (ECOWAS), which will enable Guinea to deflect attention away from its own stalled transition. 

Burkina Faso, Mali and Niger initially founded the Alliance of Sahel States (AES) as a collective defence and mutual assistance framework; however, the union is assuming an increasingly political mandate. In January 2024, the trio notified ECOWAS of their intention to leave the bloc within 12 months. In July, junta leaders held an inaugural summit, solidifying their resolve to withdraw from ECOWAS and to formalise their political union under a new Confederation of Sahel States (CES). Details of the political union remain vague, but the Confederation will take key decisions on economic and social policy, while its members have committed to facilitate the movement of people, goods and services across the Sahelian states. For the 75 million Burkinabé, Malians and Nigeriens this could come at the expense of freedom of movement, if ECOWAS imposes travel and trade restrictions at a summit in mid-December, ahead of formal exit in January 2025. Whatever is decided, it will sit awkwardly alongside the Sahelian juntas’ continued membership of the Central Bank of West African States (BCEAO) and use of the CFA franc.

As ECOWAS confronts its Sahelian conundrum, the Guinean junta has been able to capitalise on the bloc’s need to avoid further departures, which has resulted in leniency around its own transition timetable. After the September 2021 coup, Conakry and ECOWAS agreed on a two-year transition roadmap, starting from January 2023. This pointed to transitional elections in December 2024 and the transfer to civilian rule in January 2025 – a goal which looks set to be missed. While the interim parliament has drawn up a new constitution, and the council of ministers has agreed on new organic laws, the Guinean authorities have been slow to mobilise the funds required to conduct an administrative census and draw up a new electoral roll, as agreed with ECOWAS. Until these steps are complete, the regime will be unable to hold a credible constitutional referendum or transitional elections, pointing to either rushed and flawed polls, or further delays. In the meantime, the Guinean authorities appear intent on shifting the narrative away from a transition and towards the re-establishment of the state.

Security

10. Sudanese stalemate set to persist, barring international shift  

This time last year, we expected Sudan’s civil war to conclude in 2024. Alas, international mediation has failed and violence was only moderated by the rainy season in the middle of the year. Thanks to continued support from foreign backers, the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF) have resumed heavy fighting in Khartoum, Al Jazirah State and around Al Fashir, Darfur. In 2025, we expect international mediation efforts to make little progress unless the current stalemate ends.

Multiple rounds of international mediation failed to produce a breakthrough in 2024. The SAF boycotted the most recent round of talks, held in Geneva in August, and jointly-led by Switzerland, the USA and Saudi Arabia. Currently, both sides appear determined to pursue military victory, with the RSF having gained huge swathes of territory since the conflict began in 2023, and SAF buoyed by recent gains in Khartoum after re-equipping during the rainy season. In September, a UN mission led by former Tanzanian Chief Justice Mohamed Chande Othman called for the deployment of “independent and impartial force with a mandate to safeguard civilians.” However, the following month, UN Secretary-General António Guterres said that conditions were not right for a peacekeeping force to be deployed. In November, Russia, which has supported both the RSF and SAF at different stages of the conflict, vetoed a UN Security Council resolution to protect civilians and improve humanitarian access. Regrettably, a UN-backed deployment remains unlikely in the year ahead. 

Foreign military cooperation will remain central to prospects of a military victory in 2025. Sudan is peripheral to US President-elect Trump’s foreign policy aims, so he is highly unlikely to apply pressure on the UAE or Egypt to cease support for the RSF or the SAF, respectively. Nevertheless, a potential route to ending the conflict lies in the Gulf. Emirati foreign direct investment is critical for Egypt, with the UAE announcing a USD 35 billion investment in the country last February. In the unlikely event that the UAE were to withhold this investment to convince Egypt to stop supporting the SAF, the frequency of airstrikes would probably decline, allowing the RSF to make territorial gains in Khartoum, Al Fashir and Al Jazirah State. Equally, the SAF’s supply of Iranian drones, upon which it relied heavily for its recent offensive operations in Khartoum, could also be under threat if Trump relaunches sanctions against Iran akin to the “Maximum Pressure” strategy he pursued in his first term to deter Tehran from advancing its nuclear programme and supporting armed groups including Hamas and the Houthis.

However, the conflict is more than a battle between two diametrically opposed camps. Regionally-based non-state armed groups are also involved in the conflict, especially in Darfur. Most of these groups, including the Justice and Equality Movement, oppose the RSF, and would probably attack their positions across Darfur throughout 2025 regardless of SAF’s success, or lack thereof, in Khartoum or Al Jazirah. In short, whatever happens elsewhere in Africa in 2025, the outlook for Sudan remains bleak.