African economies are entering 2026 facing a complex mix of domestic vulnerabilities and external shocks, as governments contend with fiscal strain, security challenges and a fragile global outlook, risk analysts said.
Speaking to CNBC Africa, Declan Galvin, managing director of Exigent Risk Advisory, said the year ahead is likely to test the resilience of several African economies as global financial conditions remain tight and geopolitical tensions continue to disrupt trade, investment and commodity markets.
“2026 is shaping up to be a year where existing risks are amplified rather than replaced,” Galvin said, pointing to the interaction between global shocks and long-standing structural weaknesses across the continent.
One of the key risks highlighted is fiscal pressure, particularly in countries with high debt burdens and limited revenue mobilisation. Several African governments are still grappling with the legacy of pandemic-era borrowing, while rising debt servicing costs have squeezed budgets and reduced room for social and infrastructure spending.
Although some countries have benefited from debt restructuring or relief initiatives, Galvin said fiscal vulnerabilities remain acute, especially in economies exposed to volatile commodity revenues or reliant on external financing.
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Inflation and currency risk also remain prominent concerns. While inflation has eased in some African countries following aggressive monetary tightening, currencies remain vulnerable to shifts in global risk sentiment, US interest rate expectations and capital flows.
A renewed strengthening of the US dollar or delays in expected rate cuts by major central banks could put pressure on African currencies, increasing import costs and complicating monetary policy decisions.
External shocks linked to global geopolitics are another source of risk. Ongoing conflicts in Eastern Europe and the Middle East continue to disrupt energy and food markets, with knock-on effects for African economies that are net importers of fuel or grain.
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At the same time, trade tensions between major global powers could affect demand for African exports, particularly from China, which remains the continent’s largest trading partner.
Security risks remain elevated in several regions, including parts of the Sahel, the Horn of Africa and central Africa. Political instability and conflict not only disrupt economic activity but also deter investment and strain public finances.
Galvin said that while some countries have made progress in improving governance and security, others face heightened risks linked to elections, social unrest and institutional weakness.
Climate-related risks are expected to play an increasingly significant role in 2026. Extreme weather events such as droughts, floods and cyclones have already had severe economic impacts in parts of Africa, damaging infrastructure, reducing agricultural output and increasing humanitarian needs.
“These climate shocks are no longer rare events,” Galvin said. “They are recurring risks that governments and businesses must factor into planning and investment decisions.”
Despite the challenges, Galvin noted that not all signals are negative. Some African economies are showing signs of resilience, supported by economic diversification, reform momentum and growth in sectors such as renewable energy, technology and services.
Countries with stronger institutions, credible policy frameworks and access to domestic sources of financing are better positioned to absorb shocks, analysts say.
Regional integration efforts, including the African Continental Free Trade Area (AfCFTA), could also help mitigate risks over the medium term by boosting intra-African trade and reducing dependence on external markets.
However, Galvin cautioned that risk outcomes in 2026 will vary widely across the continent, underscoring the importance of country-specific analysis rather than broad generalisations about Africa as a whole.
“For investors and policymakers, the key will be distinguishing between markets where risks are manageable and those where vulnerabilities are intensifying,” he said.
As the year begins, Africa’s risk landscape is defined less by a single dominant threat than by the interaction of multiple pressures global financial conditions, geopolitical uncertainty, climate shocks and domestic structural challenges.
How governments respond to these overlapping risks, analysts say, will shape economic performance and investor confidence across the continent in 2026.
