Business Opportunities & Risks in Africa

Economy and Geopolitics

The African continent is characterized by economic opportunities and geopolitical challenges. While many countries continue to struggle with political instability and structural inequalities, international investment and innovative regional initiatives suggest new growth.

Economic Dynamics: Opportunities and Challenges

Africa’s economy is recovering faster than expected after the pandemic-related slumps. According to estimates by the African Development Bank (AfDB), average economic growth in 2025 is expected to be 4.2%.

According to the report, the East African economy is expected to grow particularly dynamically and benefit from greater regional integration and investment in infrastructure. Slightly weaker growth is expected in West Africa, driven by macroeconomic reforms such as the reduction of subsidies in Nigeria and the consolidation of finances in Ghana.

Growth drivers are the renewable energies, digital technologies and agriculture sectors in particular.

Renewable energies: With abundant resources of sun and wind, Africa is becoming a global pioneer in the field of renewable energies. Countries such as South Africa, Kenya and Morocco are investing heavily in solar and wind power projects that are intended for both the domestic market and export to Europe and Asia. This development could not only contribute to the energy supply, but also create millions of jobs.

Digital transformation: The digital sector is booming. Countries such as Nigeria, Ghana and Rwanda are developing into technological hubs. Start-ups in fintech, e-commerce and healthcare are attracting international investors. The spread of mobile payment systems has also increased economic participation in rural regions.

Agriculture: Despite the challenges posed by climate change, agriculture remains the backbone of many African economies. By investing in modern technologies and irrigation systems, the continent could not only increase its food production, but also become a major exporter.

Geopolitical Developments: Alliances & Tensions

Geopolitically, Africa is caught between old and new partners. Traditional relations with Europe and the US are complemented by increased engagement from China, India and the Gulf States. This multilateral dynamic brings both opportunities and risks.

  • China’s role: China remains the continent’s largest trading partner and continues to invest in major infrastructure projects, including railways, roads, and ports. Nevertheless, the dependence on Chinese loans is increasingly critically questioned, especially in view of growing debt in countries such as Zambia and Ghana.
  • New players: India’s trade volume with Africa has doubled in recent years, while the Gulf states are investing in agricultural projects and food production. This diversification of partnerships could give Africa more bargaining power.
  • Regional instability: At the same time, the geopolitical situation remains tense. Conflicts in the Sahel, ongoing tensions in Ethiopia and the growing influence of extremist groups threaten stability and development. Regional organizations such as the African Union (AU) are working to facilitate peace processes, but their capacities are limited.

Perspectives for Africa

The next few years will be decisive for Africa’s global role. A growing young population offers both opportunities and challenges. Education and skills will be crucial to harness the potential of this population. In addition, governments must invest more in social infrastructure and governance to ensure sustainable development. The African Continental Free Trade Area (AfCFTA) could play a decisive role in this. By removing trade barriers and creating a single market with over 1.5 billion people, Africa could experience a new era of economic integration.