Africa is set to play a central role in the next phase of global economic fragmentation, with new risks in trade, borrowing and regulation also opening the door to long-term growth if governments move quickly, according to a World Economic Forum report.
The report says emerging and developing economies are facing rising pressure from trade shocks, higher borrowing costs and diverging global rules, but argues that Africa’s demographics, natural resources and regional integration efforts give the continent a strong chance to benefit from the realignment of global supply chains.
African economies are especially exposed because many are small, open and heavily dependent on foreign capital, commodity exports and external trade. The report notes that recent global policy changes have already weakened development assistance, reduced investment flows, raised debt-service burdens and increased tariff pressure on the continent.
It also says African countries continue to pay more to borrow than similarly placed economies elsewhere, while weak market depth and limited data make sovereign risk appear higher than it may be in reality. That combination, the report warns, makes the continent more vulnerable to external shocks.
At the same time, the report highlights Africa’s structural advantages, including rapid population growth, urbanization, strategic minerals, renewable-energy potential and manufacturing prospects. It says the African Continental Free Trade Area could lift GDP by a cumulative $1.4 trillion between 2021 and 2045 if fully implemented.
The report also points to the Pan-African Payment and Settlement System as a key step toward reducing dependence on foreign currencies for regional trade. It says deeper regional integration, stronger capital markets and better data could help African economies capture more value from shifting global supply chains.
To turn that potential into results, the report recommends faster implementation of AfCFTA protocols, broader use of PAPSS, improved credit-rating data and greater African participation in global ratings agencies. It also calls for more investable projects, stronger infrastructure pipelines and deeper domestic capital markets to mobilize local savings.
For African policymakers, the message is clear: fragmentation carries real costs, but coordinated regional action can help the continent build resilience and position itself for growth.
