Yemisi Izuora
As African nations reinforces their fiscal frameworks and developing deeper capital markets, experts have projected that the continents economic prospects remain comparatively robust.
The continent’s real GDP is projected to grow by more than 4 per cent in 2026 and 2027, outpacing the anticipated global growth rate of about 3 per cent.
According to Refilwe Mokate, Head of African Banks Client Coverage and Zoya Sisulu, Head of Financial Institutions Group Client Coverage at Standard Bank Corporate & Investment Banking, in a report by Africa.com, investment in energy, spanning both substantial gas projects and renewable resources, are enhancing long-term energy security. Infrastructure investment is accelerating across the continent, modernising ports, improving logistics corridors, and upgrading transport networks.
This positive outlook is supported by the African Continental Free Trade Area (AfCFTA), which, with over 48 ratifying states, is expected to boost collective income by US$450 billion by 2035 and increase intra-African trade by more than 80%. Such developments will benefit a rapidly expanding population of 1.4 billion people and provide Africa with a valuable buffer against ongoing global volatility.
The first quarter of the year has passed, yet the number of significant events and shocks during these three months has equalled what one might expect over several years.
“We, like many around the globe, have watched global developments unfold with a mixture of concern and apprehension. Even though many of these events are occurring far from our shores, Africa has not remained untouched by their repercussions.” the experts said.
The ongoing geopolitical tensions have reshaped trade routes and disrupted supply chains across the world.
They have also restricted external financing and changing perceptions of risk have influenced capital flows into emerging markets, including those in Africa. These dynamics have a direct impact on liquidity, funding costs, commodity prices and the performance of African currencies, underscoring how closely Africa’s economies are linked to the wider global economic cycle.
The notion of “Africa direct investment” has become particularly relevant, emphasising the importance of regional integration now more than ever.
This blend of global challenge and African resilience framed discussions at Standard Bank’s 29th African International Banking Seminar (AIBS) recently held in Johannesburg. The conference highlighted the opportunities that arise from strategic collaboration between African banks and the competitive edge gained by institutions that manage risk proactively, invest in technology, and adapt global trends for local benefit.
Mobilising capital remains crucial for achieving Africa’s development ambitions. As global financial conditions shift, the need for deeper domestic markets becomes more pressing. This involves creating robust interbank mechanisms, diversifying sources of funding, establishing regional capital platforms, and promoting sustainable finance.
Innovation is a key driver of optimism. As global supply chains are reconfigured, Africa has a unique opportunity to enhance regional manufacturing and trade. Achieving this, however, depends on financial systems that facilitate seamless cross-border flows.
Africa is rapidly upgrading its payments ecosystem, improving real-time interoperability, exploring digital assets, and adopting Artificial Intelligence (AI) and big data for improved fraud detection, customer service, and strategic decision-making. The African Development Bank estimates that AI could contribute up to US$1 trillion in GDP growth for the continent by 2035.
Africa’s demographic profile strengthens its outlook. Over 60 per cent of the population is under the age of 25, making it the youngest region globally.
By 2050, the working-age population is projected to increase by more than 620 million people.
To harness these demographic strengths, Africa requires a financial ecosystem that fosters inclusive growth, which is reflected in the evolving relationship between banks and fintechs: A shift from competition to collaboration.