Africa’s financial landscape underwent notable shifts in 2025 following changes in global trade policies and a sharp decline in foreign aid flows, developments that placed fresh pressure on many low-income economies across the continent.
The changes were largely driven by policy decisions taken by major global economies, alongside cuts in development assistance, which reshaped how African financial markets performed during the year. Despite these challenges, a handful of African countries showed resilience and managed to sustain environments that support efficient financial markets.
A report released by Absa found that only ten African countries recorded improvements in their financial markets over the period under review.
The report, titled The Absa Africa Financial Markets Index, has assessed the development of financial markets across Africa for nine consecutive years. It measures performance using indicators such as transparency, market access, and openness.
In its 2025 edition, the index examined Africa’s financial performance against the backdrop of global policy shifts, including Donald Trump’s trade policies and the introduction of significantly higher trade tariffs.
Although the overall picture appeared mixed, the report noted that progress continued in several key areas across the continent, including product diversification, foreign exchange policy reforms, and climate-related initiatives.
“On a headline basis, the last year may feel like a bit of a disappointment. Just 10 of the 29 countries in the 2025 index saw their overall scores improve,” the report states.
“But the detail shows that progress continues to be made across the region, particularly in foreign exchange reforms, improved product diversity, and action on climate change,” it adds.
The report also pointed to currency stability as a critical factor in shielding African economies from unpredictable external shocks.
This view was echoed by Ahmed Attout, Director of Financial Sector Development at the African Development Bank, who said, “Long-term local currency financing is key to economic development.”
He added, “When the financial sector mobilises domestic resources and allocates them efficiently, everyone benefits – individuals have many options for savings and investments, and the private sector and governments can fund their investment needs.
“Countries with strong domestic capital markets are better positioned to withstand external shocks, including currency volatility or global interest rate hikes.”
Based on the findings of the Absa Africa Financial Markets Index, the report outlined the African countries with the most developed financial markets, highlighting those that have built stronger systems despite a difficult global environment.
