Keypoints:
- Africa’s economy outpaced global growth in 2025
- Trade fragmentation is creating new manufacturing opportunities
- Afreximbank urges faster AfCFTA implementation and industrialisation
AFRICA could emerge as an unexpected beneficiary of growing trade wars, geopolitical fragmentation and shifting supply chains, according to Afreximbank’s African Trade Report 2026, released by the African Export-Import Bank in Cairo in June 2026.
The report says Africa’s economy grew by 4.5 percent in 2025, outperforming global growth of 3.4 percent, while merchandise trade expanded by 6.1 percent to approximately $1.5tn and intra-African trade rose to $213.8bn. Against a backdrop of escalating geopolitical tensions and changing trade routes, Afreximbank argues that the continent has a rare opportunity to accelerate industrialisation and deepen regional integration.
The report, published amid escalating trade disputes, supply-chain disruptions and conflict-driven uncertainty across key maritime corridors, contends that Africa can leverage these disruptions to accelerate industrialisation, deepen regional integration and strengthen its position within global value chains. Its central argument is that global fragmentation can become a catalyst for industrialisation, regional integration and value addition if African governments act decisively.
The report also highlights initiatives such as the Pan-African Payment and Settlement System (PAPSS) as important tools for reducing trade barriers, strengthening economic sovereignty and supporting cross-border commerce.
‘The choices Africa makes today will shape the opportunities available to its young and rapidly growing population, determine the competitiveness of African enterprises, and define the continent’s position within industries and value chains of the future,’ Afreximbank President George Elombi writes in the report.
The end of predictable globalisation
For more than three decades, global trade was driven by increasingly integrated supply chains, lower production costs and expanding international commerce.
That model is now under strain.
According to the report, a succession of shocks including Brexit, US-China trade tensions, the Covid-19 pandemic, Russia’s invasion of Ukraine and escalating tensions involving the United States, Israel and Iran have accelerated a shift towards a more fragmented global economy.
Rather than concentrating manufacturing in a small number of locations, multinational companies are increasingly diversifying production to reduce geopolitical risks. Governments are placing greater emphasis on supply-chain security and economic resilience.
The report describes an emerging global order characterised by regionalisation, strategic competition and ‘friend-shoring’, where production is increasingly located within politically aligned or lower-risk jurisdictions.
This transition is reshaping investment flows, manufacturing decisions and trade routes. For Africa, the challenge is ensuring that it becomes a destination for investment rather than a bystander to global change.
Supply chains under pressure
One example highlighted in the report is the disruption of traditional shipping routes linking Asia and Europe.
According to Afreximbank, journeys that once took around 14 days increasingly require between 21 and 24 days as vessels reroute around the Cape of Good Hope because of instability and security concerns affecting the Red Sea and surrounding maritime corridors.
The longer routes increase fuel consumption, freight costs, insurance premiums and delivery times, exposing vulnerabilities within global supply chains.
For African economies, the disruption presents both a challenge and an opportunity. While higher transport costs can affect imports and exports, the changing geography of trade could strengthen the strategic importance of African ports, logistics hubs and regional manufacturing centres.
Africa outpaces the global economy
Despite mounting global uncertainty, Africa delivered a stronger-than-expected economic performance in 2025.
According to Afreximbank, the continent’s real GDP growth accelerated from 3.4 percent in 2024 to 4.5 percent in 2025, comfortably outperforming global growth of 3.4 percent.
Several of Africa’s largest economies, including Egypt, Nigeria and South Africa, benefited from stronger industrial activity, tourism recovery, technology-sector expansion and ongoing structural reforms.
Inflation also moderated significantly. Aggregate inflation across Africa declined from 21.6 percent to 13.1 percent as tighter monetary policy, improved food supplies and greater exchange-rate stability helped ease price pressures.
Trade performance remained resilient. Merchandise trade expanded by 6.1 percent to approximately $1.5tn, while intra-African trade grew by 5.5 percent to reach $213.8bn.
These figures demonstrate growing resilience across many African economies despite a difficult international environment.
A manufacturing opportunity emerges
One of the report’s most significant conclusions is that geopolitical disruption may unintentionally create conditions favourable to African industrial development.
As multinational firms diversify supply chains away from traditional manufacturing centres, new production locations are becoming increasingly attractive.
Africa possesses several advantages.
The continent holds many of the critical minerals required for the global energy transition, including cobalt, lithium, manganese, graphite and rare earth elements. It also has abundant renewable energy resources, a rapidly growing labour force and expanding consumer markets.
Historically, however, many African economies have remained trapped in low-value commodity exports.
The report argues that current geopolitical shifts provide an opportunity to change that trajectory.
Rather than exporting raw materials alone, African countries can expand domestic processing, manufacturing and value-addition industries, capturing a larger share of global value chains while creating employment and strengthening industrial capabilities.
At a time when resilience has become a strategic priority for global businesses, Africa’s role in manufacturing networks could expand significantly.
The scramble for Africa’s minerals
The geopolitical competition reshaping global trade is also intensifying demand for Africa’s critical minerals. As Africa Briefing noted in its analysis of Africa’s leading critical minerals hotspots, the continent is becoming increasingly central to global supply chains for energy-transition technologies and advanced manufacturing.
From Washington to Beijing and Brussels, major powers are racing to secure access to the raw materials required for electric vehicles, renewable energy systems, battery storage technologies and advanced manufacturing industries.
China and India remain among Africa’s largest trading partners, underscoring how shifts in global supply chains and geopolitical alliances could reshape the continent’s external economic relationships over the coming decade.
Africa possesses many of the resources sought by industrial powers, including cobalt, lithium, manganese, graphite and rare earth elements. Yet the continent continues to capture only a fraction of the value generated by global supply chains.
The report suggests that geopolitical fragmentation could provide an opening for African countries to negotiate more favourable investment arrangements, strengthen domestic processing industries and move further up the value chain.
The debate is no longer simply about extraction. Recent Africa Briefing reporting on
Africa’s $29.5tn strategic minerals opportunity and new regional minerals alliances
highlights the growing focus on beneficiation, processing and industrial development rather than raw exports alone.
The challenge will be ensuring that the current competition for resources translates into industrial development rather than simply reinforcing historical patterns of raw commodity exports.
Failure to do so could leave Africa trapped as a supplier of strategic minerals to competing global powers while others capture the higher-value stages of production.
AfCFTA becomes more important than ever
Afreximbank identifies the African Continental Free Trade Area as the continent’s most important economic instrument.
The AfCFTA has the potential to create a larger integrated market, support industrial clustering and strengthen regional value chains. Recent initiatives such as Africa’s digital trade backbone demonstrate how the continent is building the infrastructure needed to support cross-border commerce and deeper regional integration.
Intra-African trade rose by 5.5 percent to $213.8bn in 2025, highlighting both the progress achieved and the scale of the opportunity that remains.
The report argues that faster implementation of AfCFTA tariff schedules, rules of origin and national coordination mechanisms will be essential if Africa is to maximise the benefits of changing global trade patterns.
A stronger continental market would reduce dependence on external demand and improve resilience against future geopolitical shocks.
Regional integration is therefore not merely a trade objective but a strategic necessity.
The $74bn obstacle
Despite the optimism, the report identifies a major structural constraint.
Africa’s estimated $74bn trade finance gap remains one of the biggest obstacles to industrialisation.
Many exporters continue to struggle with foreign-exchange shortages, limited correspondent banking relationships and restricted access to affordable financing.
These challenges limit the ability of African firms to participate fully in international trade and expand production.
The report argues that development finance institutions must play a larger role in addressing this deficit.
Afreximbank disbursed $17.5bn in 2024 and is working towards doubling intra-African trade finance to $40bn by 2026.
Without greater access to trade finance, many industrialisation ambitions could remain unrealised.
Building financial sovereignty
The report also highlights the strategic importance of financial infrastructure.
The Pan-African Payment and Settlement System (PAPSS) is gaining traction across the continent, with more than a dozen central banks connected to the platform. Africa Briefing recently reported that PAPSS could process up to 80 percent of Africa’s payment flows within five years highlighting its growing role in reducing reliance on foreign currencies and supporting AfCFTA trade.
By enabling cross-border transactions in local currencies, PAPSS aims to reduce transaction costs and lessen dependence on external currencies such as the US dollar and euro.
This represents a broader effort to strengthen Africa’s financial sovereignty while facilitating regional trade.
As geopolitical tensions increasingly affect global financial systems, reducing exposure to external vulnerabilities is becoming a strategic priority.
A defining decade for Africa
The report, published under the theme Leveraging Geopolitics for Trade and Industrialisation in Global Africa, argues that Africa stands at a critical turning point.
The report argues that:
‘Africa must act urgently to convert global fragmentation into an engine for resilient, inclusive growth and value-added sustainable trade.’
Achieving that goal will require faster AfCFTA implementation, stronger industrial policies, expanded trade finance, improved infrastructure and greater investment in value addition. It will also require coordinated action across the continent.
As Afreximbank president George Elombi notes, ‘Africa’s future should no longer be defined by the narratives and limitations of the past, but by ambition, innovation, and a strong focus on execution.’
The question is no longer whether the global trading system is changing. It is whether Africa can move fast enough to convert geopolitical disruption into industrial power before the opportunity passes.
The next phase of globalisation may not be defined by how much Africa exports, but by how much of what it exports is processed, manufactured and financed on the continent itself.
