News

Africa is at the centre of emerging geopolitical trade conflicts. Competition among major economic blocs for Africa’s resources is intensifying – in principle, a favourable starting position for the continent. “Yet despite its vast resource base and market power, the continent has become a pawn of global actors,” explains Thorsten Fischer, Managing Director and Head of Portfolio Management at Moventum AM.

In a world of growing geopolitical tensions, countries are drawing closer together: established trade blocs are consolidating, while new ones are emerging. However, while Europe, India, Canada and Germany are realigning their trade relations and simultaneously deepening cooperation with China, the African continent remains institutionally fragmented, resulting in significant strategic disadvantages.

Instead of acting collectively and speaking with one voice, African states are increasingly pursuing bilateral agreements with the United States, China, Russia or Turkey: 55 countries, 55 different negotiation approaches – without regional or continental coordination. This approach carries the risk of a new “scramble for Africa”, in which individual African states act as junior partners rather than leveraging their collective market power. The result: weaker pricing power and diminished strategic leverage.

“The core of the problem is institutional,” explains Fischer. “The African Union is not a supranational entity like the EU.” It lacks direct legal enforcement, a centralised trade policy and fiscal instruments. In addition, many member states are heavily dependent on customs revenues, which encourages unilateral action.

In fact, Africa possesses considerable bargaining power: by 2030, approximately 1.7 billion people could form the African domestic market. At the same time, the continent controls dominant shares of critical raw materials, including around 70 per cent of global cobalt and nearly 80 per cent of platinum group metals. However, producer countries such as the Democratic Republic of the Congo, Zambia, Zimbabwe, Namibia, South Africa and Morocco negotiate separately. Strategic resources are offered individually rather than as part of a geopolitical package.

A striking example is the African Growth and Opportunity Act (AGOA) between the United States and Africa: following US tariff increases, countries such as Kenya, South Africa and Lesotho held individual discussions with Washington. A coordinated African response failed to materialise.

The structural asymmetry is particularly evident in relations with China. Since 2009, the People’s Republic has been Africa’s largest trading partner, with bilateral trade volumes now exceeding USD 280 billion. In 52 of 54 African countries, China has become a more important trading partner than the United States – a trend that has steadily intensified over time. In many countries, Beijing is not only the leading importer, but also a key investor, lender and financier of infrastructure projects.

For investors, this creates a dual reality: on the one hand, international – and particularly Chinese – capital is generating tangible infrastructure development and growth impulses. On the other, the strong concentration of external influence significantly increases political and strategic complexity. Africa has the potential to act geopolitically on equal footing as a unified bloc – yet in practice, it operates as a mosaic of individual states, each pursuing its own priorities.

While some countries are responding with export restrictions or demanding greater local value creation, the absence of coordination risks creating a patchwork of regulations rather than a coherent industrial strategy. “For capital markets, this fragmentation is a clear disadvantage,” says Fischer. “Investors see isolated markets with political risks, not an integrated growth area with economies of scale.”

A key strategic lever would lie in the consistent implementation of the African Continental Free Trade Area. However, without political coherence and common negotiating positions, its enormous potential remains largely untapped. “In a world of increasing bloc formation,” Fischer concludes, “unity is not an idealistic goal, but an economic necessity.”