In Summary
- Investor attitudes across Africa are shifting due to leadership changes and elections in 2025, particularly in nations like Senegal, Cameroon, Chad, and South Sudan, which are impacting economic strategies and global confidence.
- Numerous African nations are undertaking challenging yet strategic economic reforms linked to IMF conditions, including floating exchange rates, subsidy reductions, and legal changes — initiatives that may create short-term disruption but are aimed at achieving long-term stability.
- Africa’s geopolitical landscape is changing as countries such as Niger and Ethiopia are diversifying their international ties, moving away from predominantly Western associations to include Russia, Gulf states, and China, influencing investment trends and purchasing decisions.
Deep Dive!!!
Africa is full of promise, and in 2025, investors are particularly attentive to the continent. Key political events, including significant elections and regional shifts, are expected to shape economic growth and foreign relationships.
This year, it’s not only about risks; it’s also about recognizing areas of change and their implications for Africa’s investment landscape.
Here are the top 10 political economy risks that investors are monitoring throughout Africa this year.
10. Policy Shifts Under New Leadership
Senegal experienced a peaceful transfer of power with the election of President Bassirou Diomaye Faye in March 2024. As the new government sets its agenda, investors are closely observing the evolution of economic reforms, anti-corruption initiatives, and regional diplomacy — focusing on new sectors and enhanced transparency.
9. Fragile Peace Deals in Post-Conflict States
Libya, South Sudan, and Ethiopia are navigating transitions that hold potential for stability and growth. Although challenges like election delays and localized conflicts persist, active diplomatic measures and peace deals present opportunities for long-term political normalization, benefitting infrastructure, energy, and agriculture.
8. Currency Reforms Create Economic Adjustments
Recent currency liberalizations in Nigeria and Ethiopia have led to short-term inflation, marking a shift towards more transparent monetary practices. These reforms, part of broader fiscal realignments, are setting the stage for a more predictable investment landscape in the medium term.
7. Regulatory Shifts in the Digital Economy
Africa’s technology and finance sectors are rapidly evolving. Kenya is tightening regulations on mobile lending through new licensing requirements, while Nigeria’s tech industry is adapting to proposed changes like the NITDA Bill. As regulatory frameworks mature, they establish clearer routes for sustainable investment in fintech and innovation.
6. New International Partnerships Take Shape
Nations such as Niger, Burkina Faso, and Mali are redefining their global relationships, forming new alliances with emerging international players. Ethiopia is also balancing connections with Gulf nations, China, and Western countries. These changes indicate a strategic reshaping that could create new markets and funding sources, especially in infrastructure and security.
5. Steady Progress Following Electoral Milestones
Chad’s return to constitutional governance after the 2024 elections demonstrates increasing political maturity. With General Mahamat Idriss Déby now in power, the focus shifts to how governance reforms and inclusive development strategies could enhance investor trust, especially in the oil, telecommunications, and public service sectors.
4. Economic Nationalism Shapes Public Sentiment
Populist movements are gaining momentum in response to global inflation, particularly in South Africa and Zimbabwe. While these trends may pose challenges for foreign investors, they also clarify national priorities. For companies willing to align with local interests, this creates opportunities for strategic partnerships.
3. Localized Conflicts Require Smart Risk Management
Security issues in the eastern Democratic Republic of Congo, Sudan, and parts of Nigeria are disrupting logistics and resource access. Nevertheless, ongoing peace-building efforts, regional collaboration, and private-sector initiatives are contributing to the stabilization of key economic areas, especially in mining and agriculture.
2. High-Stakes Elections Draw Global Attention
Cameroon is gearing up for a crucial presidential election on October 5, 2025. As long-standing leadership faces increasing demands for change, investors are monitoring the electoral process closely. A fair and inclusive election could enhance confidence in the country’s political and economic future.
1. Military-Led Transitions Seek Regional Solutions
Mali, Burkina Faso, and Guinea are extending their transition periods while addressing constitutional changes and ongoing negotiations with ECOWAS. Although these delays might create uncertainty in the short term, the continued dialogue and commitment to eventual civilian governance indicate a focus on stability and structured leadership — essential components for long-term investment.
