AFRICA FINANCE IN BRIEF: Capital, trade and the race for Africa’s biggest markets

Africa’s biggest economies are entering a new phase of competition for capital, trade and financial influence. South Africa is confronting a rare reversal in Foreign Direct Investment even as a Gulf banking giant targets its financial sector, while Nigeria is drawing fresh interest from European development finance. Across the continent, growth forecasts, export rankings, and new investment flows are showing where investors see opportunity—and where structural weaknesses remain.

Here are the stories shaping the week

South Africa records first negative FDI inflows since 1990

South Africa recorded its first negative FDI since 1990 last year as multinational companies repatriated profits, adjusted intracompany financing and completed major mergers and acquisitions transactions.

Why it matters: The reversal highlights the fragility of investment confidence in Africa’s most industrialised economy. While the decline may partly reflect corporate transactions rather than a broad investor exit, sustained negative inflows could weaken job creation, productivity and long-term growth.

Gulf banking giant eyes Africa’s largest economy after Nigeria expansion

First Abu Dhabi Bank, the United Arab Emirates’ largest lender, is preparing to seek a banking licence in South Africa, extending its African ambitions after opening a representative office in Nigeria earlier this year.

Why it matters: FAB’s entry would bring new Gulf capital and competition into Africa’s most sophisticated banking market. It also reflects a wider shift as Middle Eastern lenders look to fill gaps left by European banks retreating from parts of Africa.

European lender targets Nigeria, Kenya, Francophone West Africa in five-market expansion

The European Bank for Reconstruction and Development is using Nigeria as the base for a wider expansion into sub-Saharan Africa, committing at least $1.5 billion over three years while targeting Kenya, Benin, Senegal and Côte d’Ivoire for new investment.

Why it matters: The expansion could unlock more financing for private businesses, banks and entrepreneurs in markets where access to long-term capital remains limited. It also signals growing confidence in Nigeria’s role as a gateway to West Africa and the continent’s wider investment opportunity.

Nigeria holds steady, South Africa improves as growth slows across Sub-Saharan Africa

Nigeria’s growth forecast remains unchanged at 4.1 percent for 2026, while South Africa received a modest upgrade to 1.1 percent, even as the International Monetary Fund expects economic momentum to slow across much of sub-Saharan Africa.

Why it matters: The forecasts show Africa’s two largest economies are becoming relatively more important to the region’s growth outlook. But weak expansion in South Africa and uneven growth elsewhere underline the challenge of translating macroeconomic stabilisation into stronger jobs, investment and household incomes.

Africa’s biggest exporters ship $496bn in goods to global markets

Africa’s largest exporting economies shipped a combined $496.2 billion worth of goods to global markets last year, highlighting both the continent’s trade potential and its continued dependence on a small number of commodity-heavy economies.

Why it matters: Export performance is a key measure of productive capacity, foreign-exchange strength and global competitiveness. The rankings also reveal a widening divide between countries building manufacturing and value-added exports and those still reliant on oil, gas and minerals.

Chart of the Week