Africa's next investment frontier destination appeal hit

Jihadist uprisings in the Sahel, ethnic conflicts in the Horn of Africa, and a up to eight coup d’états that brought down governments in West and Central region stain Africa’s next investment frontier appeal.
Wars in Sudan, Ethiopia, and the Democratic Republic of Congo (DRC) continue to displace millions of people, cause humanitarian crises and capital flight.
These crises, along with climate shocks and rising prices around the world, made things worse and turned potential growth engines into places of despair.

Africa’s next investment frontier appeal received a beating in 2025 as a confluence of wars, coup d’états and conflicts conspired to dampen the continent’s image. A combination of military coups, long-lasting wars, and political instability destroyed economies, broke trade networks, and damaged the continent’s fragile reputation as the next investment frontier.

The year showed how weak post-colonial institutions are. There were constant jihadist uprisings in the Sahel, simmering ethnic conflicts in the Horn of Africa, and a number of coups that brought down governments in West and Central Africa. The African Union (AU) reported eight attempted or successful coups, the most in a single year since 2010.

Wars in Sudan, Ethiopia, and the Democratic Republic of Congo (DRC) continue to displace millions of people and cause humanitarian crises. The economy felt the effects right away and they were bad. The World Bank said that sub-Saharan Africa’s GDP would shrink by 1.5 per cent to 2 per cent, and foreign direct investment (FDI) would drop by 25 per cent from 2024 levels.

Africa’s next investment frontier image damaged by wars, youth left hopeless

This chain of events not only made it harder for people to move around and for businesses to get what they needed, but it also hurt Africa’s story of stability, educated youth, and readiness for investment. It made people face the costs of uncontrolled authoritarianism and foreign interference.

Guinea-Bissau’s military takeover in January was the first of many coups in the Sahel region that started in Mali in 2020. By the middle of the year, Burkina Faso’s junta had extended its rule indefinitely, citing threats from jihadists. At the same time, Niger’s leadership faced ECOWAS sanctions that cut off trade with the landlocked country.

Sudan’s civil war between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) got worse in the east. It forced 10 million people to leave their homes and stopped oil exports, which used to make up 90 per cent of the country’s GDP.

These crises, along with climate shocks and rising prices around the world, made things worse and turned potential growth engines into places of despair. The AU’s Peace and Security Council held 15 emergency meetings, but they couldn’t come to any agreements because there wasn’t enough money and the regions were too divided. Africa had to deal with its own problems.

The Wave of Coups: From the Sahel to Central Africa

In 2025, there was another wave of coups, like the one that happened from 2020 to 2022, with eight events that made government unstable across the continent. In West Africa, Guinea-Bissau’s February coup removed President Umaro Sissoco Embaló from office, citing corruption and poor economic management.

At the same time, Chad’s transitional government extended its mandate, going against AU deadlines. In March, there was a failed coup in the Central African Republic (CAR) in Central Africa. This made Wagner Group’s power and mineral exploitation even worse.

These events, which were caused by bad government and economic hardship, stopped the state from working properly, with juntas putting security ahead of development. According to an analysis by Democracy in Africa, coups cause FDI to drop by 15 to 20 per cent because investors leave unstable countries, making new democracies into pariah states.

The cost to the economy was immediate. According to World Bank estimates, post-coup sanctions cut GDP growth in Niger in 2024 from 4.8 per cent to 1.2 per cent, and uranium exports, which made up 40 per cent of the budget, were severely affected. Burkina Faso’s economy grew by 4.9 per cent in 2024, but it shrank in 2025 because gold mining, which makes up 70 per cent of exports, stopped because of jihadist attacks.

According to IMF data, coups also caused capital flight, with $2.5 billion leaving Sahel economies in the first quarter of 2025 alone. This made the debt burdens even worse, reaching 65 per cent of GDP across the region. The job market got worse, with 500,000 jobs lost in mining and agriculture. This led to more illegal immigration and a 10 per cent drop in remittances.

Wars That Bleed Economies Dry: Rising Conflicts

Wars, like coups, destroyed important economies and made things even more unstable. According to UN estimates, Sudan’s war, which is now in its third year, has displaced 12 million people and stopped $1.5 billion worth of oil exports, which will reduce GDP by 12 per cent in 2025.

The AfDB’s 2025 report says that Ethiopia’s Tigray spillover into the Amhara and Oromia regions forced three million people to leave their homes and cut agricultural production by 20 per cent and foreign direct investment (FDI) by 30 per cent.

What’s more, the DRC’s eastern wars, which were fought by 120 armed groups, stopped $2 billion in cobalt exports, which are very important for batteries around the world. This caused the country’s GDP to drop by 5 per cent and $500 million in lost revenue.

These wars not only damaged infrastructure—$10 billion worth of damage in Sudan and the DRC alone—but they also cut off trade routes. According to the World Trade Organization, Sudan’s Port of Sudan, which handles 80 per cent of East Africa’s imports, lost 40 per cent of its capacity, which raised costs in the region by 15 per cent.

Labor mobility came to a halt: two million refugees fled Sudan, putting a strain on host economies like Uganda ($300 million a year), and seven million displaced workers in the DRC left mines idle, costing $1 billion in output. The African Standby Force of the AU was supposed to step in, but it didn’t have enough money, so conflicts continued and economies lost money.

Economic Costs: Trade, Investment, and Jobs Are Falling Fast

According to a joint AU-World Bank report, the chaos in 2025 cost Africa $150 to $200 billion in lost business. Trade volumes fell by 12 per cent and foreign direct investment (FDI) fell by 28 per cent from 2024.

Sahel coups alone cost $20 billion in lost growth, as ECOWAS sanctions isolated Niger and Mali, slashing regional trade by 25 per cent. According to USGS 2025 data, war in Sudan stopped $4 billion in agricultural exports, which caused food prices to rise by 50 per cent. In the DRC, the conflict caused cobalt prices to fall by 15 per cent.

Investors ran away because they were afraid of risk. Planned projects worth $15 billion were canceled, and mining foreign direct investment (FDI) fell by 40 per cent in countries that had a coup. According to ILO 2025 estimates, 10 million jobs were lost—5 million due to conflicts and 5 million due to coups.

This led to a brain drain and a drop in remittances of 18 per cent ($50 billion lost). Africa’s image as a stable frontier shattered, with risk premiums rising 200 basis points, deterring $30 billion in FDI, according to Moody’s 2025 outlook.

A Bad Reputation: Africa’s Next Investment Frontier Story in Shambles

The chaos in 2025 hurt Africa’s reputation as a good place to invest, as the continent’s “next frontier market” appeal faded in the face of news of coups and violence. The Economist Intelligence Unit lowered the credit ratings of four countries to “high risk,” which raised borrowing costs by 3–5 per cent.

Additionally, youth potential—Africa’s one billion under-30s—turned to peril, as unemployment hit 15 per cent, sparking migrations of three million skilled workers, per IOM 2025 data. Global perceptions soured: a Pew survey showed 40 per cent of investors viewing Africa as “unstable,” down from 25 per cent in 2024. The AU’s “Silencing the Guns” agenda faltered, with 12 conflicts active, eroding trust in regional bodies and stalling AfCFTA implementation.

Path to Recovery: Rebuilding Amid the Rubble

Recovery demands urgent reforms: the AU’s 2025 Charter Review proposes stronger anti-coup mechanisms, while ECOWAS’s sanctions overhaul aims to balance deterrence with humanitarian aid.

Economic stabilization requires $100 billion in multilateral financing, per AfDB, focusing on youth employment and conflict resolution. Success stories like Rwanda’s post-genocide rebuild offer hope, but Africa’s 2025 scars remind us: without inclusive governance, the youth bulge risks implosion, not explosion.