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Global Private Credit: A $3 Trillion Asset Class Transforming Global Finance

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Private credit, once a relatively obscure corner of the financial world, has surged into the spotlight as a powerful and increasingly global asset class. As of late 2024, the global private credit market has surpassed $3 trillion in assets under management (AUM), encompassing corporate lending, asset-backed securities, real estate, and infrastructure debt. This marks a dramatic transformation in how capital is allocated and risk is managed in the modern financial system.

In 2023 alone, private credit lenders deployed $333.4 billion in new capital, a staggering 64% increase from the previous year. This surge has been driven by a combination of bank retrenchment, the search for higher yields in a volatile interest rate environment, and the maturation of private credit as a credible and scalable financing option. Once a niche product offered to a narrow circle of institutional investors, private credit is now being embraced by a broader audience—including pension funds, sovereign wealth funds, mutual funds, and family offices.

Regional Breakdown of the Private Credit Boom

North America

North America remains the epicenter of the private credit market, commanding approximately $1.24 trillion in assets. This accounts for around 41% of the total global AUM. The U.S. continues to be the largest and most developed private credit market, driven by a sophisticated financial infrastructure, strong legal frameworks, and consistent investor demand. The presence of numerous middle-market companies seeking alternatives to traditional bank loans has made direct lending in the region particularly robust.

Europe

Europe has emerged as a major hub for private credit, with total AUM estimated at around $599 billion. This includes $374 billion in Europe ex-U.K. and $225 billion in the U.K. The continent has seen remarkable growth over the past decade; private credit AUM in Europe grew from $93 billion in 2013 to over $500 billion by 2023. Market dynamics in Europe have been shaped by stringent banking regulations, making it harder for SMEs to secure financing from traditional lenders and creating fertile ground for private credit providers.

Asia-Pacific

Asia-Pacific is one of the fastest-growing regions for private credit, with assets under management reaching approximately $120 billion as of the end of 2023. This marks a more than six-fold increase from $15.4 billion in 2014 to $99.3 billion by 2023. The growth has been fueled by structural economic reforms, expanding middle-class economies, and increased participation from both global and regional institutional investors. Markets like India and Southeast Asia are particularly active, as demand for infrastructure development, real estate financing, and growth capital rises.

Africa

Africa represents a nascent but promising frontier for private credit. With an estimated market size of around $3 billion, the sector is still in its infancy but poised for expansion. Key drivers include the continent’s massive infrastructure financing gap, rapid urbanization, and increasing entrepreneurial activity. Traditional banks often fall short in addressing the financing needs of small and medium enterprises (SMEs), leaving a crucial space for private credit to step in. As financial regulations evolve and investor confidence grows, the continent could become a significant player in the global private credit landscape.

The Prospects for the Future: Worldwide Elements Changing the Market

Although the private credit market is anticipated to keep expanding, a number of significant international factors will influence its course:

  • Institutional Demand: Given the poor returns from conventional fixed-income instruments, big institutional investors are ravenous for yield. In order to fulfill their long-term commitments, sovereign wealth funds, insurance companies, and pension funds are increasingly using private credit.

  • Bank Retrenchment: Banks are less willing to lend to riskier segments as a result of stricter banking regulations and capital requirements, especially in the wake of financial crises. Private lenders are eager to close the large gap that has been created by this.

  • Growth of Emerging Markets: In places like Asia and Africa where access to traditional financing is scarce, private credit is essential. Economic development depends on the expansion of consumer finance, infrastructure projects, and small businesses.

  • Macroeconomic Volatility: The stability of private credit portfolios is being put to the test by changes in interest rates and inflationary pressures. Long-term economic strain may result in increased default rates, especially in overleveraged industries, even though floating-rate debt instruments provide a natural hedge.

  • As mutual funds and public pension funds increase their investments in private credit, the asset class is becoming more and more integrated with public markets. Particularly during periods of financial strain, this calls into question systemic risk, liquidity, and volatility.

  • Technology Integration: New developments in financial technology, such as blockchain-based loan origination and AI-driven credit scoring, are increasing efficiency, risk management, and openness in the private credit sector.

Ending

Private credit has evolved from an opportunistic investment strategy into a structural pillar of global finance. Its rapid growth and geographic expansion underscore the increasing need for flexible, tailored financing solutions across economies. Yet, with this growth comes greater responsibility. The opacity and regulatory gaps that once defined private credit are now under scrutiny, as governments and institutions seek to ensure that this powerful tool does not become a source of systemic risk.

As we look ahead, private credit will likely continue to reshape the contours of global finance—bridging capital gaps, enabling entrepreneurship, and offering investors a dynamic alternative to traditional fixed-income products. The challenge for stakeholders will be to maintain the balance between innovation and prudence as the sector marches further into the mainstream.

Using digital identities to modernise border controls

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We all want secure, safe and easy travel.  However, with traveller numbers surging to record levels and governments wanting to unlock tourism’s full economic potential, resource-strapped immigration, intelligence and border agencies face a critical challenge:  How to handle rising demand without compromising security?

It’s a question they will grapple with when meeting this week in Addis Ababa to discuss digitalised biometric-powered traveller processes and how they can be used to promote social-economic development while countering organised international crime, terrorism and the spread of contagious diseases. 

Travel and tourism have a central place in this conversation as they are critical to national growth and prosperity.

This is a global challenge but with the right approach, even small steps can unlock big improvements, and African nations are well-placed to lead.

Growth in demand for travel

African air travel is growing fast.  Last year, passenger numbers jumped nearly 15%, and capacity expanded by 11%, according to the International Air Transport Association (IATA).  Long starved of investment, African governments are improving airport infrastructure to boost visitor numbers.   Ethiopia’s US$7.8 billion, four-runway, Bishoftu mega-airport may be the continent’s biggest but it is one of several developments.  Morocco is investing US$4.1 billion in airport expansions ahead of the 2030 FIFA World Cup and Luanda’s new Dr Agostinho Neto International recently opened for business.

The border challenge in focus

Increased passenger numbers and shiny new terminals won’t deliver the full benefits unless borders keep pace.    

Simultaneously, to improve global security, the UN Security Council has resolved to strengthen member states’ ability to track potential terrorist movements.  Despite successes in South Africa and Angola many African countries are still thinking about how to develop or enhance such capabilities.  

From static systems to dynamic responses

Border security must remain the priority alongside infrastructure expansion. However, it must reflect the technology advancements that are changing traveller expectations and presenting new security threats.  

Borders must not become bottlenecks.  Interoperability, speed, coordination and adaptability are fundamental.  Dynamic, digitalised tech-driven borders let governments adjust policies and procedures in real-time, strengthening security and enhancing their countries’ attractiveness as destinations for travel, trade, tourism and investment.  It requires a mindset shift to think of borders as a vital part of an integrated, connected system instead of just a checkpoint.

Why integration matters

Effective borders involve immigration, customs, public health, intelligence and law enforcement agencies.  A siloed approach fuels fragmentation, inefficiencies and creates serious security gaps, whereas an integrated model brings together data and decision-making across agencies. Integration delivers a single-window view of each traveller or item entering a country.  It makes assessments simpler, responses faster and leaves resources focused where they’re needed most.

The good news is that African countries aren’t hamstrung by outdated legacy systems so they can leapfrog advanced Western economies by adopting an integrated borders concept.

A better experience at the border

IATA reports that over 70 per cent of travellersface long queues and repeated document checks. This causes frustration and drains resources even when most travellers are not a risk.

By pre-clearing travellers before they arrive, using secure digital identities and tapping into real-time data, border agencies will relieve congestion and process people more efficiently.  Because airport and border experiences make indelible first and last impressions, improved traveller and shipper experiences will promote a positive image of an airport and a country.

Start small. Think big.

Some of the most effective changes start small with a consistent, collaborative and modular approach.

The advancement of digital travel credentials (DTCs) is a case in point.  Worldwide there is soaring demand for faster, contactless travel processes – with over 60% of passengers saying they would pay for a DTC.   Aruba’s pre-clearance DTC pilot has proven it is possible to move passengers through the border in just eight seconds, while also improving passenger data accuracy and compliance.   

How countries can quickly make progress

These focused steps can soothe immediate pain points and lay the groundwork for more ambitious transformation.

It needs near-term and long-term views, i.e.

  • what can be improved now with minimal disruption?
  • how will these improvements contribute to a larger vision of a fully digital, integrated, dynamic, and even more secure border?

Small actions, thoughtfully executed, can build momentum for big change.

A unique opportunity for Africa

Borders will always be about anticipating and managing risk. But by rethinking how people, goods and information move across borders, African governments can build more secure, efficient and agile systems that are aligned with how the world works today and, crucially, that balance security with the economic benefits of increasing travel and tourism.

Pedro Alves is a Vice President Global Business Development at SITA (Société Internationale de Télécommunication Aéronautique), the global air transport industry-owned IT-tech organisation that works with over 75 governments— including every G20 nation — to modernise airport and border operations.

Ethiopia and Uzbekistan: A Partnership with Untapped Opportunities

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Ethiopia and Uzbekistan established diplomatic relations in 1996. Over the years, bilateral ties have strengthened. However, there are still a lot of untapped opportunities within the bilateral relations between the nations and there is less awareness about Uzbekistan in Ethiopia. This article serves as an introduction to Uzbekistan and explores opportunities that could benefit both countries.

Uzbekistan is a Turkic nation located in Central Asia bordering Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Afghanistan. If we break down the country’s name, “stan” means land, therefore Uzbekistan translates to “the land of Uzbeks.” Uzbekistan houses 37 million people and many ancient cities. Three of the most prominent being Samarkand (2800 years old), Karshi (2700 years old) and Bukhara (around 2000 years old). The nation’s rich history doesn’t stop with its architectural feats. Uzbekistan has a rich history of contributing to the world’s progress. We can recall famous historical figures Uzbekistan gave birth to. Muhammad al-Khorazmi, a famous mathematician, was born in ancient Khorezm. Khorazmi invented algebra, a fundamental math concept that is taught all over the world today, with the name “algebra” originating from the name of his book “al-jabr” (al jabr w’al muqabala). He also invented algorithms which would later lead to the invention of the computer and other modern technologies.

Another famous historical figure from the land of Uzbekistan is Ibn Sina. Ibn Sina is better known as Avicenna, and he is considered one of the founders of early medicine. Al-Biruni is another important scientist born in Beruni, Uzbekistan. Biruni used trigonometry to calculate the radius of the Earth using measurements of the height of a hill and measurement of the dip in the horizon from the top of that hill. His calculated radius for the Earth is 3928.77 miles. This was two percent higher than the actual mean radius of 3847.80 miles but was an achievement that bested many other contributions to science at the time. The list goes on as there are many other Uzbeks that contributed to the development of the world as we see it today.

There are various sectors Uzbekistan and Ethiopia can cooperate with and achieve mutually beneficial outcomes. Tourism is one of such sectors. Ethiopia, known for its fascinating nature and authentic culture, could be a new destination for travelers from Uzbekistan. Similarly, Uzbekistan’s Silk Road heritage, ancient cities and UNESCO World Heritage Sites could attract Ethiopian travelers.

Trade and Investment are also potential spheres to collaborate. Uzbekistan is famous for its agricultural products, cotton exports. When it comes to Ethiopia, the country is known for its coffee and different agricultural goods that could be exported to Central Asian markets.

In recent years, Uzbekistan developed itself as a top destination for investors. In the past seven years, Uzbekistan has successfully attracted over $78bn in foreign investments, with the adoption of a comprehensive law on public-private partnerships leading to the launch of more than 1,000 projects. There are also opportunities and tax benefits for foreign investors including Ethiopian entrepreneurs in the country.

There is also a room for partnership in education and culture. Uzbekistan hosts a lot of international festivals, such as “Sharq Taronalari Musical Festival” and “Kokand International Crafts Festivals”. These festivals could allow Ethiopian artists to showcase their works and find potential partners for collaboration.

In conclusion, while diplomatic ties between Ethiopia and Uzbekistan have steadily grown since 1996, there remains significant untapped potential for deeper collaboration. By expanding partnerships in tourism, trade, investment, and cultural exchange, both nations stand to benefit economically and culturally.

President Trump and Rare Earth Minerals: What’s in It?

During his first Presidency (2017–2021), Donald Trump placed renewed focus on rare earth minerals, recognizing their critical importance to U.S. national security, technology, and economic independence – especially amid growing tensions with China. His administration took several steps to secure domestic supply chains for these materials, which are vital for everything from smartphones to fighter jets.

Why Rare Earths mattered to President Trump? Rare earth minerals contain elements essential for military systems (e.g., missiles, radars, and aircraft components); electronics (e.g., smartphones, batteries, and displays) as well as for clean energy technologies (e.g., wind turbines and electric vehicles).

At the time, the U.S. was heavily dependent on China, which controlled over 80% of the global rare earth processing market. The Trump administration saw this as a strategic vulnerability.

What Was in Trump’s Rare Earth Policy? Trump’s efforts to boost rare earth mineral production and reduce reliance on foreign sources included: Executive Orders and National Emergency Declarations – in 2017, rare earths were identified as critical minerals under a Trump-commissioned list by the U.S. Geological Survey (USGS). In 2020, Trump issued an executive order declaring a national emergency over the U.S.’s reliance on foreign rare earths, particularly from “adversarial nations.” It authorized the Defense Production Act to fund and accelerate domestic mining and processing.

Funding for U.S. Projects – the Trump administration allocated millions of dollars through the Department of Defense to support rare earth mining and processing projects in the U.S., including partnerships with companies like MP Materials, which owns the Mountain Pass mine in California, the only rare earth mine in operation in the U.S.

Trade Policy and Tariffs – during the U.S. – China trade war, rare earths became a bargaining chip. China threatened to limit exports of rare earths to the U.S., prompting Trump to look for non-Chinese sources – such as Australia and Canada – and to support domestic alternatives.

International Partnerships – Trump’s administration signed agreements with allies like Australia and Japan to create alternative supply chains for rare earth materials, bypassing Chinese control.

What’s the Legacy? Trump’s actions brought rare earths into mainstream political and industrial focus. While he did not fully re-establish U.S. rare earth independence, his administration laid the groundwork for greater U.S. investment in critical mineral supply chains; renewed interest in rare earth refining and recycling and stronger international cooperation on resource security

His successor, President Biden, has largely continued and expanded these efforts, especially within the context of climate policy and green technology development.

To conclude, President Trump’s rare earth policy was rooted in strategic competition and national security. What was “in it” was a recognition that these minerals – though invisible in daily life – power some of the most important technologies in Defense, energy, and industry. His administration’s focus on rare earths helped shift the U.S. toward a more secure and self-reliant future in critical minerals.