Why 2026 could be the year Africa rewrites its investment story

Speaking at the SuperReturn Africa Conference, John McDermott, Chief Africa Correspondent for The Economist, examined what experts are predicting from Africa for the coming year and how inflation, currency and interest rate trends are shaping investment decisions.

For years, Africa’s economic narrative has been shaped by volatility, uneven reforms and political fragility. Yet beneath the noise, the continent’s fundamentals have been shifting, quietly at first, then unmistakably in 2024 and 2025. As we move toward 2026, investors with an eye on long-term opportunity may find that Africa is no longer a peripheral consideration, but a region entering a new phase of geopolitical relevance and economic resilience.

A front-row seat to multipolar geopolitics

Africa today offers perhaps the clearest view of the world’s accelerating multipolarity. It is the place where East and West, and increasingly the ‘Rest’, intersect most visibly. A striking representation of this is a multicoloured map of trade, investment and scientific flows into Africa. The picture is unmistakable: Africa trades more with China but finances more with the West, and across nearly every category, the diversity of partners has surged in just two decades. Multipolarity brings risk but also diversification, competition and interest from new players.

US–China rivalry brings risk and opportunity

In previous cycles, African fortunes swung on the dominance of a single big partner – first China in the 2000s, and then the US in earlier decades. But in today’s geopolitical shuffle, Africa is not a bystander. If anything, the return of a more transactional US foreign policy is driving fresh commercial diplomacy. Agencies like US Exim Bank and the Development Finance Corporation (DFC) are stepping up financing in strategic corridors such as Angola’s Lobito project.

China, meanwhile, has moved from the ‘1.0 era’ of large infrastructure loans to a ‘2.0 era’ rooted in investment and consumer penetration. Chinese companies, from smartphone giants to solar technology firms, are expanding briskly across African markets. Exports from China to Africa have surged precisely because other regions are turning inward.

The rise of middle powers

More intriguing still is the growing influence of middle powers, including the UAE, Saudi Arabia, Qatar, Türkiye, India, Vietnam and Brazil. The UAE is now the fourth-largest investor in Africa. Türkiye is fast becoming a dominant infrastructure builder. Indian tech firms are laying digital foundations in emerging African markets. Vietnamese and Southeast Asian firms are pushing into agro-processing. Brazil’s agricultural research agency has opened new offices on the continent. This widening of partners creates competition – and competition improves financing, terms and long-term opportunities for investors.

African responses are more strategic than ever

Against this backdrop, African governments are not acting passively. Three responses define the current moment:

A strategic ‘scramble’ for US market access
Initial panic following tariff threats gave way to more coordinated diplomacy. As political relationships stabilise, bilateral deals, and possibly a reworked AGOA, are again feasible.

Portfolio diversification
African leaders are increasingly widening their networks to include Gulf, Asian and alternative Western partners. Deals are being struck quickly, with countries like Zambia and Ethiopia successfully pulling investment from new and agile players.

The African Continental Free Trade Area (AfCFTA)
The AfCFTA has become the symbol of Africa’s resolve to reduce fragmentation and build resilience. Nearly every country has ratified the agreement, and implementation momentum is building. AfCFTA has the potential to enable regional value chains, reduce commodity dependency, attract more manufacturing and investment, and create a unified market of 1.4 billion people.

This is the type of structural reform that changes long-term investment cases.

Macroeconomic resilience equals a turnaround

Geopolitics sets the scene, but macroeconomics drives the investment story. Here, too, Africa is signalling a shift. According to the IMF, sub-Saharan Africa is set to be the fastest-growing region globally in 2026. Ten of the world’s 20 fastest-growing economies are African. Inflation is cooling, currencies are stabilising, and several capital markets have reached record highs. Portfolio flows are turning positive, partly because global reallocations away from China are creating openings that more agile African markets can capture. South Africa and Nigeria, the region’s largest economies, are finally pushing through long-awaited structural reforms. If sustained, these reforms could unlock substantial investment momentum.

Debt remains a challenge

The biggest headwind is debt. Twenty countries are in or near distress. Many governments are increasingly relying on expensive domestic borrowing, which strains banks and crowds out private investment. Without reforms in debt management, capital markets and revenue systems, growth could stagnate.

Still, advisers should recognise that Africa’s debt problem is partly a story of underinvestment. Investment as a share of GDP lags behind Asian peers, not due to lack of opportunity, but due to demographics, underdeveloped markets and risk perceptions.

Encouragingly, new research is helping close information gaps. A recent analysis of IFC private equity returns from 1961 to 2020 shows that African returns, over the long term, outperform both MSCI EM and the S&P 500. Data like this helps correct the ‘perception premium’ that inflates Africa’s cost of capital.