Between geopolitical upheavals and continental growth dynamics: How the US impacts Africa’s 2026 Outlook
With Trump II, the rules-based world order is increasingly being shaken and is gradually being replaced by the law of the strongest. Although African countries have always criticized the constitution and the overrepresentation of “Western” countries in intergovernmental organizations such as the UN, the continent is hit particularly hard by geopolitical disruption. The geopolitical implications of the U.S. president's disruptive foreign policy style are having a decisive impact on the continent's economy. This is a forecast for Africa for the year 2026.
The United States’ public withdrawal from development cooperation and its exit from the World Health Organisation (WHO) have led to a significant reduction in health programs in Africa –with drastic consequences for the population. The tariffs announced on “Liberation Day”, which also apply to African countries and override the duty-free provisions of the African Growth and Opportunity Act (AGOA), completed the double blow right at the start of Trump's term in office.
The end of AGOA, the takeoff of AfCFTA?
AGOA, which was effectively suspended after the introduction of tariffs, formally expired in September 2025. Although an extension will be negotiated in the U.S. Congress in 2026, it is highly questionable whether an agreement on an extension will ultimately signed by President Trump.
However, the end of AGOA for African countries could also be the initial spark for more vigorous market liberalization. This is because it increases pressure on governments to push ahead with the implementation of the African Continental Free Trade Area (AfCFTA) to mitigate the impact of external shocks on the continent and strengthen intra-African trade.
At the end of last year, the Council of African Trade Ministers reached another milestone with the agreement on rules of origin for automotive products. Under the agreement, vehicles and components must contain at least 40% African (origin) content, with up to 60% imported (non-origin) materials eligible for “Made in Africa” AfCFTA trade preferences. This framework considers Africa’s current industrial base while enabling greater localization and development of supply chains across all regions. The Council adopted the 60% VNOM (value of non-originating materials) cap subject to review after five years, recognizing it as a temporary measure to support localization growth and industrial readiness in all contracting states.
Nevertheless, there is widespread criticism of the slow pace of implementation of the free trade area. In 2026, AfCFTA members will need to intensify their efforts to further integrate their markets. Non-tariff barriers, which are due to inadequate (digital and physical) infrastructure, increase transport costs and slow down regional trade.
African solar boom gains momentum
Another interesting development to watch in Africa in 2026 is the expansion of solar power production. The continent benefited from the trade war between the United States and China, which resulted in China selling its solar modules on African markets. The total capacity of panels imported from China in September 2025 was just under 1,983 megawatts – and rising.
If the grids of state-owned energy operators in African countries are unreliable, off-grid or mini-grid solutions may also be of interest to private households.
Solar expansion is gaining momentum, particularly in Algeria, Zambia, Rwanda, Senegal, Ivory Coast, and Nigeria – countries that belong to the lower middle-income countries. Improved energy availability in these countries also increases their attractiveness as locations for German companies: According to a DIHK company survey, energy deficits in African countries have often made market access difficult in the past.
Growth not driven by commodities – but enabled by commodities
The commodities sector will also play a decisive role in how the African economy develops in 2026. Last year saw a dramatic rise in the price of critical commodities such as cobalt, copper, platinum, and lithium, which are found in large reserves on the African continent. Up to now, African economic growth has been driven primarily by commodity prices. However, commodity-driven growth spurts are rarely sustainable. Many African countries are therefore introducing export bans and local content requirements to establish downstream value-added stages in the country. The development of processing capacities could potentially serve as a blueprint for general industrialization in African countries. The operation of refineries, processing plants, and manufacturing facilities creates skills that can be used in other industrial sectors. Similarly, once industrial infrastructure is in place, it can be used by a wide range of sectors.
African countries as partners in an increasingly isolated world
In a time marked by profound geopolitical upheaval, opening new markets in the Global South is crucial for Germany and the EU to reduce economic dependencies, stabilize strategic supply chains, and secure long-term political and economic leeway.
A deeper partnership with African countries also opens substantial growth and innovation potential: it enables access to dynamic sales markets, promotes joint value creation, and at the same time strengthens the geopolitical position of Germany and the EU in an increasingly volatile world order.
