The African economic landscape in the third quarter of 2025 presents a complex tapestry of resilience and vulnerability, characterized by divergent market performances against a backdrop of significant external trade shocks. James Norris, Corporate Africa, examines key African stock markets in Q3 2025, assesses the impact of these trade policy shifts, and provides a strategic outlook for investors navigating these evolving dynamics.

With projected continental GDP growth of 4.1 per cent for 2025, expected to accelerate to 4.4 per cent in 2026, Africa remains one of the world’s faster-growing economic regions, yet this growth is unevenly distributed across nations. The quarter witnessed two major developments with profound implications for African markets: the implementation of new US tariff regimes and the expiration of the African Growth and Opportunity Act (AGOA), which for 25 years provided duty-free access to US markets for qualifying African economies.

African equity markets displayed remarkable divergence throughout the third quarter of 2025, with frontier markets like Ghana and Kenya outperforming while more established markets faced headwinds. This performance pattern underscores the idiosyncratic nature of African investments, where country-specific factors often outweigh regional trends.

Ghana’s stock market emerged as the region’s standout performer, extending its year-to-date gain to an impressive 66.1 per cent in local currency terms by the end of September. This remarkable performance was fueled by strong demand for banking stocks, including Ecobank Ghana, which surged 17.7 per cent in the latter part of the quarter, and consumer sector players like Fan Milk, which gained 10.2 per cent. Ghana’s success story reflects broader investor confidence in the country’s economic recovery trajectory, supported by its $3 billion IMF program and promising GDP growth that averaged 6.3 per cent in the first nine months of 2024 (the most recent full-year data available) .

Kenya’s market also demonstrated notable resilience, posting a 2.5 per cent gain in the final week of September as it recovered from previous declines. The market enjoyed broad-based support across financials and retail counters, with Crown Paints surging 15.4 per cent, CIC Insurance gaining 13.7 per cent, and Co-operative Bank advancing 10.4 per cent . This performance occurred against a backdrop of ongoing regional portfolio reshaping by financial institutions, exemplified by developments such as DTB Kenya’s announcement of plans to sell its Burundi unit.

South Africa’s Johannesburg Stock Exchange (JSE) demonstrated remarkable resilience, posting strong gains despite domestic challenges. This performance highlights its status as a deep, liquid market where performance is often linked to global factors and large, dual-listed companies. The market was a top performer in the third quarter, achieving record highs despite domestic economic challenges and the imposition of new US tariffs.

The Johannesburg Stock Exchange (JSE) saw a powerful upswing with its FTSE/JSE Africa All Shares Index (SAALL) reaching an all-time high of 109,328 points in October 2025. The index gained 7.46 per cent during September and was up a remarkable 26.16 per cent compared to the same time last year. The rally was broad-based but notably driven by resource stocks. Gold miners like Sibanye, Harmony, and AngloGold Ashanti surged as a weaker US dollar and expectations of Federal Reserve rate cuts boosted gold prices. Industrial metals and mining stocks also performed strongly, with giants like Anglo American and Glencore posting significant gains. Robust prices for gold and platinum group metals (PGMs) were a key driver of the market’s strength.

In contrast, North African markets faced distinct challenges during the quarter. Morocco’s MASI index declined 3.0 per cent in the week ending September 26, pressured by financials such as AGMA, which fell 11.2 per cent, and blue chips including Cosumar and Taqa Morocco, which declined 6.5 per cent and 7.3 per cent respectively. Mauritius and Tanzania also experienced modest declines of 0.02 per cent and 0.4 per cent respectively, reflecting selective investor flows and consolidation in these more mature markets.

Sector Performance Trends

The third quarter of 2025 revealed clear sectoral leadership within African markets with financial services, consumer goods, and select commodity sectors driving performance across most exchanges. However, financial services dominated. The banking sector emerged as the primary engine of growth in multiple top-performing markets. In Ghana, Nigeria, and the BRVM region, financial institutions posted impressive gains, benefiting from improving macroeconomic stability, digital financial inclusion trends, and enhanced regulatory environments. The sector also witnessed ongoing regional consolidation and portfolio optimization, as illustrated by Ecobank finalizing its exit from Mozambique and other institutions reshuffling their African operations.

Consumer Goods Momentum:

Companies focused on Africa’s growing consumer class demonstrated strong performance across multiple markets. From Fan Milk’s 10.2 per cent gain in Ghana to International Breweries’ 10.1 per cent increase in Nigeria, the consumer sector benefited from the expansion of middle-class populations and evolving spending patterns. This trend aligns with broader demographic shifts across the continent, where urbanization and rising incomes continue to create opportunities in consumer-facing industries.

Commodity-Linked Resilience:

Markets with significant exposure to critical minerals and agricultural commodities demonstrated resilience, though performance was mixed. Zambia’s market gains were supported by its copper industry, reflecting ongoing global demand for the metal essential to electrification and renewable energy technologies. Similarly, countries like Botswana benefited from their mineral resources, though the quarter also highlighted the volatility inherent in commodity-dependent markets as global prices fluctuated.

Despite the severity of the US tariffs on South Africa, analysts from JPMorgan noted their impact on South African assets was “limited,” as markets had “largely priced in the reality of higher tariff headwinds”. The rand strengthened, and the JSE continued its upward climb, partly because many of South Africa’s key exports to the US, such as gold, coal, and critical minerals, were exempt from the tariffs. Furthermore, large dual-listed companies on the JSE are more driven by global factors than by South Africa-specific tariffs

EXTERNAL FACTORS INFLUENCING MARKET PERFORMANCE

Impact of US Tariffs on African Markets

The implementation of country-specific US tariffs beginning in August 2025 created significant headwinds for several African economies, with particularly pronounced effects on South Africa. The 30 per cent across-the-board tariff imposed on South African goods dramatically altered the trade landscape for Africa’s most developed economy.

The automotive sector experienced particularly severe disruption, with export volumes to the United States tumbling by 83 per cent so far this year. Paulina Mamogobo, Chief Economist at the National Association of Automobile Manufacturers of South Africa, starkly noted that “any benefits the industry previously derived from AGOA have essentially been nullified” by the new tariff regime. Similarly, South Africa’s wine industry faced existential challenges in the US market, prompting a strategic pivot toward alternative markets including China, Japan, and Canada—the latter offering unexpected opportunity due to its 25 per cent retaliatory tariff on US goods.

The impact of these tariffs varied significantly across African nations. While South Africa faced the highest tariff rate at 30 per cent, other countries encountered more moderate but still consequential rates: Kenya faced 10 per cent tariffs, while Madagascar and Mauritius faced 15 per cent duties. This differential impact created a fragmented trade landscape across the continent, with some economies better positioned to withstand the new trade barriers than others.

Impact of AGOA Expiration on Market Sentiment

The lapse of the African Growth and Opportunity Act on September 30, 2025, created immediate uncertainty for many African exporters and negatively impacted market sentiment toward export-dependent sectors. After 25 years of providing duty-free access to US markets for thousands of products from eligible sub-Saharan African countries, the expiration of this program introduced significant uncertainty for businesses that had built their operations around preferential access.

The immediate effect was particularly severe for low-margin, high-volume sectors such as textiles and apparel. Pankaj Bedi, chairman of Nairobi-based apparel company United Aryan, which supplies major US retailers including Target and Walmart, predicted “immediate layoffs” as tariffs as high as one-third the value of textile exports snapped back into place. Bedi noted that while some “responsible buyers” had agreed to absorb temporary losses in hopes that AGOA would be renewed retroactively, this support would become unsustainable if an extension is not agreed by November 2025.

The expiration threatened not only existing operations but also the long-term investment thesis for export-oriented manufacturing across Africa. The program had been instrumental in fostering US foreign direct investment in the region, contributing to the establishment of more resilient supply chains. Its lapse created uncertainty about whether the manufacturing gains achieved in countries like Kenya, Madagascar, and Lesotho could be sustained without preferential market access.

Despite these challenges, it is important to note the asymmetric impact of AGOA’s expiration across different African economies. While the program accounted for nearly $10 billion in US imports from Africa in 2023, this represented only a small fraction of overall US merchandise imports . However, for specific countries such as Lesotho and Madagascar, AGOA trade represented a substantial share of their total exports, making them particularly vulnerable to the program’s lapse.

Q4 2025 OUTLOOK FOR AFRICAN STOCKS

Economic and Policy Projections

As African markets enter the final quarter of 2025, several key economic and policy developments will likely shape performance. The prospective extension of AGOA represents a critical near-term factor, with the White House having expressed support for a one-year extension and bipartisan legislative backing for a much longer 16-year renewal. The timing and scope of any renewal will have important consequences for export-dependent economies and sectors.

Monetary policy across major African economies continues to evolve, with Nigeria’s central bank cutting its key rate by 50 basis points to 27 per cent in September— its first easing in four years. This decision suggests a broader trend toward monetary accommodation as inflation pressures moderate in some markets, potentially creating more favorable financing conditions for businesses and consumers.

The implementation of the African Continental Free Trade Area (AfCFTA) continues to represent a structural opportunity for the continent, with projections suggesting it could boost intra-African trade by 52 per cent by 2035. However, with only 24 countries currently participating, integration challenges and implementation gaps continue to constrain the full benefits. Complementary initiatives like the proposed Pan-African Payment and Settlement System (PAPSS) could further enhance regional liquidity and reduce transaction costs if successfully implemented.

3.2 Strategic Investment Opportunities

Trade policy uncertainties create headwinds, but African markets still present compelling strategic opportunities for discerning investors in the fourth quarter of 2025.

Critical Minerals and Green Energy

Africa’s 30 per cent share of global critical mineral reserves—including cobalt, lithium, and copper essential for electric vehicles and renewable energy systems—positions the continent as a strategic player in the global energy transition. Strategic partnerships in extraction and processing, particularly those involving low-carbon infrastructure, represent significant opportunities despite broader market volatilities.

Digital and Financial Inclusion

The continued expansion of mobile money and fintech platforms across Africa offers substantial growth potential, particularly given the continent’s youthful demographic profile. Companies facilitating financial inclusion and digital services are well-positioned to capture value from the structural shift toward digital economies across African markets.

AfCFTA-Driven Regional Value Chains

Early movers in sectors poised to benefit from regional integration—including logistics, e-commerce, and agro-processing—stand to capture significant value as intra-African trade gradually increases. Companies with pan-African ambitions and capabilities may find competitive advantages in navigating the evolving trade landscape.

Investors considering African markets in Q4 2025 should include Risk Assessment among several persistent challenges and should also implement appropriate mitigation strategies:

Political and Governance Challenges

The Sahel and Horn of Africa remain geopolitical hotspots, with conflicts continuing to disrupt trade and investment flows. Additionally, the formation of the “Alliance of Sahel States” by Burkina Faso, Mali, and Niger signals a shift toward regional self-reliance that may complicate broader integration efforts. Investors should implement robust political risk assessment frameworks and consider diversification across multiple jurisdictions to mitigate these challenges.

Debt Sustainability Concerns

With over 20 African countries at risk of debt distress and high public debt consuming 27 per cent of government revenues in 2024, fiscal constraints remain a significant headwind to growth and stability. However, innovative financing mechanisms such as debt-for-climate swaps and blended finance models may offer pathways to unlock capital for sustainable projects while addressing debt burdens.

Currency and Liquidity Management

The inherent volatility of many African currencies continues to represent a significant risk for foreign investors, particularly in markets with less developed capital controls and hedging instruments. Similarly, limited liquidity on smaller exchanges can create challenges in establishing and exiting positions efficiently. Implementing disciplined currency management strategies and maintaining appropriate investment horizons can help mitigate these challenges.

Conclusion

African stock markets present a study in contrasts as 2025 enters its final quarter, with spectacular performances in select frontier markets like Ghana and Malawi coexisting with significant challenges in more established markets like South Africa. This divergence underscores that Africa cannot be treated as a monolithic investment destination—success requires country-specific analysis and careful attention to evolving sectoral dynamics.

The dual shock of US tariffs and AGOA expiration has introduced significant uncertainty, particularly for export-dependent economies and sectors. However, these challenges are somewhat balanced by positive changes happening within the countries, such as ongoing economic reforms, supportive monetary policies in important markets, and slow but steady progress towards regional integration through AfCFTA.

For investors who can handle risk and are willing to wait, African markets still present attractive opportunities in areas that support the continent’s growth, such as digital transformation, financial inclusion, critical minerals, and regional value chains. Navigating these markets successfully in Q4 2025 will require a balanced approach that acknowledges the very real risks while remaining attentive to the substantial potential rewards emerging from Africa’s evolving economic landscape.

The final quarter of 2025 will be decisive in determining whether Africa’s growth trajectory can withstand external trade shocks and internal challenges or whether the current divergence between markets will widen further. What remains certain is that African markets will continue to offer complex, dynamic opportunities for investors capable of navigating their unique risks and rewards.