Addressing Africa’s debt burden, including high cost of debt, remains a prerequisite for unlocking development finance. The composition of the continent’s debt has also shifted significantly. Whereas most external debt was previously owed to high income countries and multilateral lenders such as the World Bank and the International Monetary Fund (IMF), China and private creditors now account for a growing share of debt stocks, increasing the proportion of non-concessional borrowing. This changing landscape underscores the importance of advancing debt relief, restructuring, and debt-swap mechanisms aligned with development and climate objectives. Such efforts will need to be pursued at both national and international levels, while countries also prioritise the resolution of unsustainable or poorly structured liabilities, particularly non-concessional debt owed to private creditors and some sovereign lenders.
Discussions also highlighted several structural features of the global financial architecture that continue to shape investment outcomes for African economies. These include the methodologies used by international credit rating agencies, persistent perceptions of elevated ‘African risk’, quota and representation systems within multilateral financial institutions, and cost asymmetries relative to global peers. Together, these factors influence access to finance and the pricing of capital, often raising borrowing costs for African countries. Addressing these structural imbalances will be essential to ensure that African economies operate on a more level playing field in global financial markets. Reform of the global tax regime and stronger action to curb illicit financial flows were also identified as critical priorities. Africa is estimated to lose $88.6 billion annually to illicit financial flows, much of it linked to tax evasion and avoidance[1].
Regional economic integration emerged as a critical pathway for strengthening Africa’s development prospects within the evolving global financial landscape. Anchored in the African Continental Free Trade Area (AfCFTA), deeper integration can support domestic resource mobilisation by expanding intra-African trade, strengthening regional value chains, and fostering more resilient and inclusive growth. Analysis by the Institute for Security Studies (ISS) suggests that full implementation of the AfCFTA could increase Africa’s GDP by around 10 per cent and reduce the number of people living in extreme poverty by more than 32 million by 2043[2]. Integration also offers an opportunity to rebalance Africa’s trade patterns, shifting away from a continued reliance on exports of raw commodities to external markets toward greater intra-African trade and value addition within the continent. As Africa advances development pathways linked to critical minerals, AI and DPI, ensuring that value chains develop within the continent will be essential to capturing greater developmental benefits.
Discussions also highlighted the growing relevance of new and more flexible forms of regional integration. Beyond formal regional frameworks, issue-based and corridor-driven cooperation is increasingly bringing countries together around specific economic opportunities or shared infrastructure. Initiatives such as the Lobito Corridor illustrate how targeted investments in transport, energy, and logistics can catalyse cross-border trade, unlock critical mineral value chains, and deepen economic interdependence across regions. These emerging models, often built around practical economic interests rather than formal institutional arrangements, can complement existing regional architectures by accelerating connectivity, reducing trade costs, and creating new platforms for coordinated development and investment.
At the same time, Africa’s development trajectory will continue to be shaped by broader shifts in the global political economy. Scenario analysis by the ISS African Futures programme suggests that Africa’s medium-term prospects will be significantly influenced by evolving global power dynamics and rising geopolitical fragmentation[3]. In scenarios characterised by cooperation and relative stability, opportunities for investment and growth are likely to expand. Conversely, increased global conflict, protectionism, and competing geopolitical blocs may constrain development prospects. Even under favourable global conditions, however, sustained progress will depend primarily on stronger regional integration and sound domestic policy choices, as externally driven development alone will not keep pace with Africa’s rapid population growth.
[1] UNCTAD. (2020). ‘Economic Development in Africa Report 2020: Tackling Illicit Financial Flows for Sustainable Development in Africa’.
[2] Institute for Security Studies (ISS). ‘African Futures and Innovation Programme: The AfCFTA’. https://futures.issafrica.org/thematic/08-afcfta/.
[3] Institute for Security Studies (ISS). (2025). ‘Africa in the world (Theme 18)’. https://futures.issafrica.org/thematic/18-africa-in-the-world/.