Lately, Africa has attracted considerable interest from the international business community. This interest has come not just from the “usual suspects” in the natural resources sector but from a much broader array of stakeholders, including telecommunications, energy, infrastructure, logistics, heavy manufacturing, and even high technology.
African business development experts like Christopher Roy Garland, a Botswana-based financial consultant who has worked with governments and business leaders across southern Africa for decades, ascribe this trend to a variety of factors. These include a rapidly growing population, rising standards of living, and expanding “innovation ecosystems” in many African countries.
Yet as we look ahead to 2025 and beyond, it is clear that Africa faces many challenges. Let’s take a look at those most likely to affect economic activity and investment decisions on the continent, alongside some of the opportunities that promise to entice homegrown and outside investors alike.
1. Stable Governance Remains a Challenge
Africa has seen nine military coups since 2020, according to the Georgetown University Walsh School of Foreign Service. Several of these have occurred within the ECOWAS region of West Africa, popularly known as the Sahel, where countries including Niger, Mali, and Burkina Faso have all experienced nondemocratic leadership changes.
Military coups are nothing new in Africa, but their increasing frequency is cause for concern among supporters of the democratic process on the continent and abroad. Looking ahead, experts like Chris Garland expect countries with unstable governance to have difficulty attracting new international investment amid increasing competition from more stable African nations.
2. Political Instability Is Rising in Some African Democracies
Instability is also affecting African countries not known for political upheaval. For example, Kenya has for months experienced sometimes violent protests brought upon by unpopular government policies. Although leaders in countries like Kenya are more responsive to popular opinion, and mass protest movements have recently occurred elsewhere around the world, this development is concerning for stakeholders who previously believed certain countries were “immune” from political risk.
3. Infrastructure Investment Could Benefit From Falling Interest Rates
Now, to a possibly massive opportunity for African businesses and host countries: large-scale infrastructure investment. The continent has seen a number of big road, rail, and port projects recently, and the expectation that global interest rates will fall in 2025 could unleash billions in sidelined investment capital. The nations most likely to benefit are those with stable, predictable governance and pro-business policies.
4. Homegrown Innovators Are Expanding the African Value Chain
One of the most exciting developments of late has been growth in homegrown “innovation” sectors like mobile technology, software, and clean energy systems. African scientists and inventors are increasingly taking the lead in developing these technologies and industries, creating knock-on benefits for their skilled and semi-skilled compatriots. As internationally educated African professionals return home to start businesses, the current period of growth could prove to be just a taste of what’s coming.
5. New Natural Resource Plays Offer Exciting Opportunities for Domestic and Foreign Investors
Many African countries remain disproportionately dependent on natural resources for economic growth. However, the notion of a “resource curse” is a bit outdated, according to experts like Garland.
This is the case for several reasons. First, African governments are more sensitive to their roles as natural resource stewards and thus more inclined to invest intentionally and deliberately in extraction and processing initiatives. Second, they are more inclined to see outside investors as partners, and to structure resource licenses accordingly. Finally, they are more focused than ever on “ascending the value chain” by requiring more material processing, fabrication, and assembly to be done on their soil.
New Year, New Opportunities
What will 2025 bring for the 1.2 billion (and counting) who call the African continent home?
We can’t know for sure, of course. If the past few years are any indication, 2025 will be full of new uncertainties and new challenges.
But 2025 will also be a year filled with opportunities for Africa. As we do our best to turn the page on an unusually tumultuous period, we can look for inspiration to the millions of talented men and women working — often under difficult conditions — to make life better for themselves and those around them.
Their work will not be measured along a binary scale, with no room between success and failure. Like those who came before them, their work is incremental, aiming for measurable if not dramatic improvements.