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Escalating trade tensions between the United States and China are heightening risks for African economies, as President Donald Trump’s threat of fresh tariffs follows Beijing’s sweeping export controls.
The renewed standoff has triggered a global market selloff, sending Brent crude prices tumbling to US$62 per barrel on Friday and driving down copper and other key commodities — a blow to resource-dependent African countries.
According to Access Bank’s daily market commentary, the sharp drop in oil prices poses serious challenges for exporters such as Nigeria and Angola, whose currencies are heavily reliant on crude earnings for foreign exchange inflows.
“Angola derives over 90 percent of its export revenue from oil, making the kwanza acutely exposed to sustained price weakness. Nigeria’s naira, despite recent reform progress, remains sensitive to oil dynamics given crude accounts for roughly 80 percent of foreign exchange earnings. Falling prices squeeze fiscal accounts and limit central bank intervention capacity,” the commentary noted.
The outlook was equally concerning for copper-dependent Zambia, where trade war fears were dampening demand for the red metal, which generates about 70 percent of the country’s hard currency.
Analysts warn that the Kwacha’s strong 2025 performance could come under pressure if commodity prices remain subdued.
Despite the headwinds, some African currencies still retain supportive fundamentals, as looser global monetary conditions continue to attract yield-seeking capital flows.
Investors are now watching closely for developments from the upcoming Trump–Xi summit, which could determine the next direction of market sentiment.
Adding to the broader picture, a Boston University Global Development Policy Center report released on Friday revealed that developing nations in the Global South repaid US$3.9 billion more annually to China in debt service than they received in new loans in 2022 and 2023 — signalling a shift to negative net debt transfers.
Analysts warn that the reversal, involving the world’s largest bilateral creditor, could deepen economic pressures and constrain investment in climate-related projects.
Between 2008 and 2024, China committed more than US$472 billion through its policy banks to fund over 900 infrastructure projects worth US$316 billion across transport, energy, information technology, and water sectors — investments credited with driving growth and reducing poverty across recipient countries.
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