CROSSROADS: Middle East, Asia, Latin America, Sub-Saharan Africa

Here is a summary of the most important events that unfolded over the last month in the Middle East/North Africa, Asia (ex-China/India/Japan), Latin America, and Sub-Saharan Africa, and which may affect economic, financial, and geopolitical issues in the months ahead.

Middle East & North Africa

The United Arab Emirates officially exited OPEC and the broader OPEC+ alliance on May 1, ending nearly six decades of membership and marking one of the most consequential shifts in global oil governance in years, as Abu Dhabi seeks greater autonomy over production policy and the flexibility to align output with its expanding capacity and economic strategy. Immediate price reactions were muted due to overriding factors such as geopolitical disruptions and constrained shipping through the Strait of Hormuz, which continue to dominate supply dynamics and keep crude prices elevated. However, the UAE’s departure removes one of OPEC’s few producers with substantial spare capacity, weakening the cartel’s ability to manage supply shocks and coordinate output to stabilize prices, which development analysts say could erode pricing discipline and reduce Saudi Arabia’s influence within the group. Freed from quota constraints, the UAE is now positioned to gradually increase production toward levels approaching 5 million barrels per day, which could introduce additional supply into global markets and exert downward pressure on prices if fully realized. More broadly, the exit signals a shift toward a more fragmented and competitive oil market in which large producers prioritize national strategies over collective management, raising the likelihood of greater price volatility and complicating long-term investment and supply planning as OPEC’s role as a central stabilizing force diminishes.
Israel and Lebanon have agreed to extend their U.S.-brokered ceasefire by 45 days following talks in Washington on May 15, continuing a truce that originally began on April 16 to halt the latest phase of fighting between Israel and Hezbollah and create space for further political and military negotiations. Despite this diplomatic progress, the ceasefire remains highly fragile and has functioned more as a partial de‑escalation than a full halt in hostilities, with both sides continuing kinetic operations across southern Lebanon and northern Israel. Israeli forces have maintained air and ground operations in Lebanon—including repeated strikes on Hezbollah infrastructure, evacuation warnings across multiple villages, and the continued occupation of a security zone near the border—while arguing these actions are necessary to counter ongoing threats and ceasefire violations. Hezbollah, for its part, has sustained cross‑border activity, launching rockets and drones into Israeli territory and conducting attacks against Israeli forces in southern Lebanon, often framing these as retaliatory responses to Israeli strikes. Violence has persisted almost daily since the truce took effect, with hundreds killed in Lebanon during the ceasefire period and total fatalities exceeding 3,000 since the conflict reignited in March, underscoring the humanitarian toll and limited enforcement of the agreement.
The Strait of Hormuz remains in a state of effective partial blockade, driven by a dual pressure dynamic in which Iran is restricting maritime transit while the United States maintains a naval blockade on Iranian ports, leaving global shipping severely constrained rather than fully halted; this environment is further complicated by the widening regionalization of the conflict, including now‑confirmed reports that Saudi Arabia carried out covert, retaliatory airstrikes against Iranian territory in late March—the first known direct Saudi strikes on Iran—following repeated Iranian missile and drone attacks on Gulf infrastructure. Commercial traffic through the chokepoint—responsible for roughly 20% of global oil and LNG flows under normal conditions—has dropped sharply, with many vessels delayed, rerouted, or deterred entirely by security risks, insurance costs, and enforcement actions. Iranian forces have attacked or harassed commercial shipping and imposed restrictive transit rules, while U.S. naval forces have conducted escort missions and interception operations to maintain limited passage. These dynamics are now compounded by Gulf state involvement, with Saudi strikes illustrating a broader shift from defensive postures to direct retaliatory action, highlighting how the conflict has expanded beyond its original actors and increasing the risk of escalation in both maritime and territorial domains. Although intermittent pauses in military activity and diplomatic outreach have produced temporary adjustments in traffic flow, negotiations remain stalled, and the corridor continues to function far below normal throughput, forcing reliance on alternative export routes that cannot fully offset lost capacity and sustaining elevated risks to global energy supply chains.
U.S. sanctions on Iraq have intensified significantly as part of Washington’s broader “maximum pressure” campaign on Iran, creating mounting economic and political strain on Baghdad. Last month, the United States blocked shipments of roughly $500 million in U.S. dollar banknotes derived from Iraq’s oil revenues and paused elements of security cooperation, aiming to pressure the Iraqi government to curb Iran‑aligned militias and align more closely with U.S. policy. This builds on earlier measures restricting Iraqi banks’ access to dollar transactions and sanctioning financial institutions and entities accused of facilitating money laundering or supporting Iran-linked groups, which have tightened liquidity and disrupted the country’s dollar‑dependent financial system. In parallel, Washington has ended key sanctions waivers that previously allowed Iraq to import electricity from Iran, forcing Baghdad to reduce dependence on Iranian energy despite the risk of worsening power shortages and social unrest. Together, these steps have contributed to currency pressure, a widening gap between official and black‑market exchange rates, and heightened uncertainty in Iraq’s banking and trade sectors, illustrating how U.S. sanctions—though not directed at Iraq wholesale—are increasingly shaping its economic stability and policy choices amid the wider regional conflict.
Market Implications: MENA markets are trading with an elevated geopolitical risk premium across the period, though country-level effects diverge meaningfully. The UAE’s formal exit from OPEC and OPEC+ effective May 1 weakens collective supply discipline and reduces Saudi-led pricing power, with the move improving Abu Dhabi’s production flexibility once regional export routes normalize and supporting UAE energy-linked names and logistics over the medium term, though it also raises the prospect of intra-Gulf competition and increased oil price volatility as cartel cohesion erodes during an already historic energy shock. The dominant macro driver remains Iran, with the Strait of Hormuz effectively closed to commercial shipping, keeping crude prices in the $100 to $105 range, tanker rates elevated, and Cape of Good Hope rerouting costs structurally higher, all of which sustain upside risk for regional defense spending and energy revenues among Gulf oil exporters while simultaneously pressuring net importers. U.S. sanctions on Iran-linked militias and Iraqi financial networks increase compliance risk for Iraqi oil flows, banking sector dollar access, and trade finance, reinforcing investor preference for stronger Gulf balance sheets over higher-beta MENA exposure. Overall positioning favors the UAE and select Gulf energy names with production flexibility, while Lebanon, Iraq-linked credit, regional tourism, shipping insurance, and rate-sensitive sovereign debt remain exposed to sustained escalation risk.

Latin America & the Caribbean

The United States has significantly escalated its “maximum pressure” campaign on Cuba in 2026, tightening sanctions and effectively blocking oil shipments to the island, including threatening penalties on third party countries that supply fuel. These measures have been aimed at forcing political and economic reforms in Havana and have sharply compounded Cuba’s long-standing structural weaknesses, triggering an acute energy crisis in which the country has run out of diesel and fuel oil. With blackouts lasting more than twenty hours in some areas, the national power grid is in a critical state. The resulting humanitarian strain—disrupting transportation, healthcare, food distribution, and water access—has fueled rare and increasingly visible public protests, particularly in Havana, where residents have taken to the streets banging pots, blocking roads, and demanding electricity amid widespread outages. Analysts note that while the crisis also reflects chronic underinvestment and economic mismanagement, the intensification of U.S. restrictions and the cutoff of Venezuelan oil supplies have been decisive in pushing the system to breaking point, turning energy shortages into a broader socio-political challenge for the Cuban government.
Colombia is entering a pivotal presidential election cycle ahead of the May 31 first round, with the contest widely seen as a referendum on the legacy of President Gustavo Petro’s left‑wing government and the country’s broader political direction. The race has consolidated into a three-way contest between leftist senator Iván Cepeda (running on continuity with Petro’s reforms), conservative senator Paloma Valencia, and right-wing outsider Abelardo de la Espriella, reflecting a polarized electorate split between continuity, institutional conservatism, and hardline alternatives. Polling suggests Cepeda holds a clear lead—reaching the mid‑40% range in late April surveys—but remains below the 50% threshold needed to avoid a June 21 runoff, with fragmentation on the right shaping the electoral dynamics. The campaign has been marked by elevated political violence and security concerns, including assassinations, kidnappings, and attacks on candidates, reinforcing voter anxiety over crime and the government’s “Total Peace” negotiations with armed groups. At the same time, voters are weighing economic management, inequality, and corruption, with debates intensifying around fiscal deficits, wages, and state intervention alongside persistent concerns about security and drug trafficking. The Colombian presidential election is shaping into a high-stakes decision on whether the country deepens Petro-era reforms or pivots toward a more security- and market-oriented approach.
Brazilian President Luiz Inácio Lula da Silva is increasingly positioning Mercosur as the anchor of a coordinated, left‑leaning regional bloc, using it to advance a broader agenda of multilateralism, economic sovereignty, and South American integration amid a fragmented political landscape. Since assuming a leadership role within the bloc, Lula has emphasized Mercosur as a “refuge” and strategic platform for collective autonomy in an increasingly polarized global system, advocating deeper intra-regional trade, common industrial policies, and reduced dependence on external actors. This aligns with a broader policy push to rebuild alliances across Latin America—through forums like CELAC—and to promote a shared development model focused on inequality reduction, climate cooperation, and value-chain integration in sectors like critical minerals and energy. While Lula has sought to expand the bloc, signaling interest in bringing in additional partners like Colombia and deepening ties with external markets, Mercosur remains constrained by differing national priorities, trade disputes, and uneven economic performance among members. Lula has driven high-profile initiatives such as the EU–Mercosur trade agreement, framing it as both an economic opportunity and a statement in favor of multilateral cooperation against rising global protectionism. As Lula advances a more assertive regional agenda, recent polling shows him leading Senator Flávio Bolsonaro by a margin of 48.9% to 41.8% in a potential second‑round matchup, reinforcing his political standing as Brazil heads into elections later this year in October.
Ecuador has signed a $1.7 billion agreement with China’s CMOC Group to develop the Los Cangrejos gold‑copper project in the southwestern El Oro province, marking one of the largest mining investments in the country’s history and a major step in its push to expand beyond oil dependence. The project, considered Ecuador’s largest primary gold deposit, will be built and operated by CMOC’s local subsidiary ODIN Mining del Ecuador, with commercial production targeted later this decade and an estimated 26‑year mine life. Under the terms of the contract, Ecuador will retain roughly 50% of the project’s value and receive $54 million in advance royalties (including $34 million paid upfront), while total revenues to the state are projected at about $4.39 billion through taxes and fees. Officials present the deal as a cornerstone of efforts to attract foreign investment and scale up the mining sector, but it also highlights broader geopolitical trends, with Chinese capital expanding its presence in Latin America’s resource industries even as Ecuador continues to face regulatory, social, and environmental challenges tied to large-scale extraction projects.
In the past month, Venezuela’s political landscape has remained defined by the aftermath—not completion—of regime change following the U.S.-led capture of Nicolás Maduro on January 3, with recent reporting emphasizing a fragile and incomplete transition rather than a decisive democratic shift. Recent analyses note that while Caracas has entered a new phase of U.S.-guided political restructuring under acting president Delcy Rodríguez, key elements of the old system—including security elites, institutional control, and repression practices—largely remain intact, raising fears of a “reshuffling” rather than dismantling of the regime. In May, opposition leaders continue to demand concrete timelines for free elections and institutional reform, but the government has not committed to either, and skepticism persists that limited media openings and cabinet reshuffles will translate into genuine democratization. At the same time, ongoing protests and social unrest—particularly over wages, political prisoners, and economic hardship—highlight continued public dissatisfaction, with recent demonstrations in Caracas met at times by police pressure. Economically, conditions remain dire despite limited sanctions relief and renewed oil activity, with most citizens still facing high poverty and weak purchasing power months after Maduro’s removal.
Market Implications: Latin American markets are trading with an elevated political risk premium alongside selective support from commodity and nearshoring themes. Colombia’s upcoming election is the clearest near-term risk event, with a center-right outcome under Paloma Valencia likely supportive for the peso and sovereign spreads given expectations of improved U.S. relations and fiscal discipline, while continuity of Petro-aligned policies would sustain regulatory and fiscal uncertainty. Brazil’s active use of Mercosur as a trade platform and Lula’s push behind the EU-Mercosur accord are constructive for agribusiness, logistics, and infrastructure, offering a pro-trade counterweight to U.S.-China fragmentation, though food standards disputes remain an export risk. Venezuela remains a geopolitical trade, with any credible transition potentially unlocking oil sector upside, but U.S.-backed transition uncertainty keeps legal, sanctions, and operational risks prohibitively high for most investors. Cuba’s deepening fuel crisis and intensifying U.S. maximum pressure campaign are negative for Caribbean risk sentiment, tourism-linked assets, and regional fuel logistics, with severe blackouts and depleted reserves reinforcing instability. Ecuador offers a relatively bright spot through CMOC’s $1.7 billion Los Cangrejos gold project, strengthening the country’s mining investment narrative and supporting fiscal revenues and infrastructure demand. Overall positioning favors Brazilian agribusiness and infrastructure, Colombian assets on a center-right election outcome, and Ecuadorian mining names, while Venezuelan exposure, Cuban-linked logistics, and Mexico-facing trade names carry elevated near-term risk premia. The S&P Latin America 40 Index lost significant ground over the last month, dropping nearly 10% but still remaining at an 11% return year-to-date.

Asia & Pacific (ex-China/India/Japan)

At the 48th ASEAN Summit in Cebu this month, regional leaders placed renewed emphasis on de‑escalating the Cambodia–Thailand border dispute through coordinated diplomacy, with the Philippines, serving as ASEAN Chair, facilitating a high‑profile trilateral meeting between Cambodian Prime Minister Hun Manet and Thai Prime Minister Anutin Charnvirakul. The talks did not yield any major breakthroughs; however, both sides agreed to sustain “open and candid” dialogue through foreign ministers, pursue confidence‑building measures, and avoid actions that could reignite conflict, following deadly clashes in 2025 that left around 150 dead and hundreds of thousands displaced. Both sides reaffirmed their commitment to the existing ceasefire framework and welcomed the extension of the ASEAN Observer Team’s mandate to monitor compliance and stabilize the frontier. At the broader summit level, ASEAN leaders collectively urged peaceful resolution in accordance with international law, respect for sovereignty, and continued implementation of past agreements, while reiterating the bloc’s readiness to support mediation and humanitarian efforts. Although no final settlement was reached, the Cebu summit marked a constructive diplomatic reset—restoring high‑level engagement, reinforcing ASEAN’s mediating role, and laying groundwork for incremental de‑escalation amid persistent tensions along the disputed border.
Vietnam’s approval of a controlled Starlink pilot highlights a regional shift toward “regulated openness” in foreign tech infrastructure. While Hanoi is allowing a fully foreign-owned provider to deploy satellite internet and expand connectivity—particularly in remote and disaster-prone areas—it is doing so under strict conditions, including local gateway requirements, domestic data routing, and compliance with national security laws. The pilot, capped at 600,000 users and running through 2030–2031, effectively establishes a template for conditional market access, in which foreign firms can operate advanced infrastructure but only within frameworks that preserve state oversight and digital sovereignty. This approach signals broader implications for the region. Some governments are increasingly willing to integrate foreign-owned digital systems to boost resilience and innovation, but are simultaneously tightening control over data flows, infrastructure localization, and regulatory compliance, suggesting that future foreign tech investment across telecom, cloud, and AI will likely follow similar hybrid models balancing openness with sovereignty and strategic autonomy.
The U.S.-Philippines “Balikatan” joint military exercises, conducted from April 20 to May 8, marked the largest iteration to date and underscored intensifying regional security dynamics amid rising South China Sea tensions. Involving more than 17,000 troops from the United States, the Philippines, and multiple allies, including Japan, Australia, Canada, and France, the drills featured advanced live‑fire operations, coastal defense scenarios, and multi-domain coordination across air, land, sea, cyber, and space domains. Key activities included the deployment of long-range missile systems such as HIMARS and Tomahawk-capable launchers, counter‑landing exercises facing contested waters, and maritime strike drills near strategic chokepoints near the South China Sea and Taiwan Strait. The scale and sophistication of the exercises were widely interpreted as a demonstration of deterrence and alliance resolve in response to China’s growing assertiveness, which has included repeated maritime incidents and gray‑zone activities in disputed areas. Beijing strongly criticized the drills and conducted parallel naval and live-fire exercises, highlighting risks of escalation. The drills reflect a broader regional shift toward multilateral security cooperation and integrated deterrence, positioning the U.S.-Philippines alliance—and its expanding network of partners—as a central pillar in managing Indo-Pacific tensions.
Recent Philippines–Japan security talks this month signal a rapid deepening of bilateral defense cooperation as both countries respond to a more challenging Indo-Pacific environment, particularly China’s growing maritime assertiveness. During high-level meetings in Manila, Japanese Defense Minister Shinjiro Koizumi and Philippine Defense Secretary Gilberto Teodoro agreed to expand cooperation across policy, operations, and defense technology, including launching working-level discussions on the transfer of Japanese military equipment such as destroyers and aircraft. The talks built on newer frameworks like the Reciprocal Access Agreement (RAA) and an equipment cooperation pact, which enable joint deployments, training, logistics support, and greater interoperability between forces. Both sides also reaffirmed shared concerns over “coercive” activities in the South China Sea and East China Sea and emphasized closer coordination in maritime security, intelligence sharing, and joint exercises such as Balikatan. These talks signal a broader shift toward institutionalized, multidimensional defense ties, positioning the Philippines and Japan as key partners in a growing network of U.S.-aligned security cooperation aimed at strengthening deterrence and maintaining a rules‑based regional order.
Market Implications: ASEAN ex-China/India/Japan markets are pricing a mix of geopolitical risk, supply chain rerouting opportunity, and selective defense-led capital expenditure. The Cambodia-Thailand border dispute discussions at the ASEAN Cebu summit are mildly constructive in reducing near-term escalation risk, but reinforce the bloc’s weak crisis-coordination premium, weighing on Thai and Cambodian tourism, border trade, and logistics confidence while troops remain deployed. Vietnam’s Starlink pilot indicates a more pragmatic regulatory posture toward foreign satellite connectivity that supports data center demand, fintech inclusion, and industrial connectivity in remote manufacturing zones, with tight sovereignty controls expected to remain. The Philippines functions as the region’s primary security risk proxy, with Balikatan 2026 drills, Japan’s deepening Manila defense cooperation, and Chinese counter-patrols reinforcing defense, shipbuilding, cybersecurity, and energy security themes, offset by elevated risk premia for Philippine equities, tourism, and offshore energy exploration. Critical minerals remain a key pressure point, with Chinese indium and gallium restrictions raising input costs for semiconductors, solar, and defense electronics while benefiting alternative suppliers in Malaysia, Australia, and South Korea. Overall positioning favors Vietnamese digital infrastructure, Philippine defense and port logistics, Malaysian and South Korean critical mineral processors, and ASEAN digital economy names, while China-exposed supply chains, Thai and Cambodian border trade, and offshore energy exploration carry higher risk premia. The MSCI Emerging Markets Asia Index continued notching gains this month, bringing its year-to-date return to more than 13%.

Sub-Saharan Africa

The IMF has revised down its growth outlook for Sub-Saharan Africa in 2026, warning that the region’s recovery momentum has been undermined by the economic fallout from the Middle East conflict and a sharp decline in foreign aid. Regional growth is now projected at around 4.3% in 2026—approximately 0.4 percentage points below earlier forecasts, while inflation is expected to rise to about 5%, reflecting higher energy and food costs. The shock stems largely from surging oil and fertilizer prices, disrupted trade and remittance flows, tighter financial conditions, and worsening terms of trade for energy-importing economies, all of which are eroding household purchasing power and fiscal stability. At the same time, a steep, likely structural decline in bilateral development assistance, down by more than a fifth for some countries in 2025, has compounded vulnerabilities, particularly in low-income and fragile states with limited fiscal buffers. The IMF notes that while oil exporters may see short-term revenue gains, most economies face rising external imbalances and financing pressures, leading more governments to seek IMF support programs. The IMF emphasizes that this dual shock has diminished what had been a strong post-pandemic recovery in 2025, leaving policymakers focused on preserving stabilization gains while managing heightened downside risks.
South Africa’s political landscape has been shaken by the revival of an impeachment probe into President Cyril Ramaphosa following a landmark Constitutional Court ruling this month that overturned a 2022 parliamentary decision blocking the process as unconstitutional. The probe centers on the long-running “Phala Phala” or “Farmgate” scandal, involving the 2020 theft of at least $580,000 in foreign currency reportedly hidden in furniture at Ramaphosa’s private game farm, and allegations that he may have violated the constitution or engaged in misconduct in his handling of the incident. Parliament is now moving to establish a multi-party impeachment committee—comprising representatives from across the political spectrum—to review evidence and determine whether grounds exist for removal, a process expected to take several months. While Ramaphosa has denied wrongdoing, rejected calls to resign, and signaled legal challenges to the findings against him, the renewed inquiry has intensified pressure on his administration and tested the cohesion of the ruling African National Congress and its coalition partners. Nevertheless, analysts note that the high threshold for impeachment—a two-thirds parliamentary majority—makes his removal unlikely in the near term, even as the case raises broader concerns about governance, accountability, and political stability in Africa’s largest industrial economy.
The latest Ebola outbreak in the Democratic Republic of the Congo (DRC), centered in the conflict‑affected Ituri Province, represents a significant and rapidly evolving public health crisis, formally declared on May 15, and already classified by the World Health Organization (WHO) as a Public Health Emergency of International Concern. The outbreak is caused by the relatively rare Bundibugyo strain of the virus—one for which there is currently no approved vaccine or targeted treatment—raising concern among health authorities about containment and mortality risks. As of mid‑May, officials have reported roughly 246–336 suspected cases and around 80–88 deaths across multiple health zones, including Mongbwalu, Rwampara, and Bunia, although WHO and partners warn that actual transmission is likely higher due to underreporting and delayed detection. The outbreak appears to have circulated undetected for weeks, with early clusters among healthcare workers and communities with limited access to care, complicating response efforts. International spread has already been documented, with confirmed cases in Uganda linked to travel from DRC, underscoring the risk of broader regional transmission in a highly connected and mobile population. In response, Congolese authorities, the WHO, CDC, and other international partners have mobilized rapid response teams, intensified surveillance, contact tracing, safe burials, and treatment capacity, while deploying medical supplies and emergency funding to contain the outbreak. However, efforts are constrained by insecurity, weak healthcare infrastructure, misinformation, and shortages of protective equipment in affected areas, leaving the situation fragile and highly sensitive to further escalation.
Fighting along the Sudan–Chad frontier has intensified in recent months as drone warfare, frequently attributed to Sudan’s paramilitary Rapid Support Forces (RSF), spills across borders and deepens regional instability. Since early 2026, repeated drone strikes have hit civilian areas and border crossings in Darfur, including markets and fuel depots near Adré and Al Tina, killing and injuring civilians and disrupting humanitarian corridors used to deliver aid into western Sudan. Aid groups and UN agencies report that these strikes are part of a broader surge in aerial attacks that have killed hundreds of civilians this year, with drone warfare now a leading driver of casualties and displacement. The violence has increasingly crossed into Chad itself, including a deadly strike in the border town of Tiné that killed civilians and prompted N’Djamena to reinforce its frontier and, at times, close crossings, reflecting fears of wider regional escalation. Humanitarian consequences are mounting, as cross-border attacks and insecurity have driven new waves of displacement into eastern Chad, where already strained camps are receiving thousands of refugees fleeing bombardment.
Jama’at Nusrat al Islam wal Muslimin (JNIM), Al Qaeda’s Sahel affiliate, has intensified its southward push into northern Benin, marking a significant expansion of jihadist activity from the Sahel into coastal West Africa. Recent attacks—including an assault on a military base in Kofouno that killed at least 15 soldiers—highlight a sustained campaign targeting security forces and infrastructure along Benin’s volatile borders with Burkina Faso, Niger, and Nigeria. This offensive builds on a sharp escalation in violence over recent years, with attacks in northern Benin rising dramatically and concentrating around the W Arly Pendjari park complex, which has become a key cross-border sanctuary and staging ground for militant operations. Analysts say JNIM’s strategy combines hit-and-run raids, local recruitment, and use of porous borders to embed itself in marginalized communities, reflecting a deliberate shift toward establishing a “Sahel to coast” corridor of influence rather than holding territory outright. The offensive is also part of a wider regional surge in jihadist violence across Burkina Faso, Mali, and Niger, with Benin increasingly drawn into a cross-border insurgency driven by instability, weak state presence, and declining regional coordination following Sahelian political ruptures. While Benin has expanded military deployments and counterterrorism operations in response, the persistence of attacks and rising casualty tolls underscores the growing risk that northern Benin could become a permanent frontline in the broader Sahel conflict and a gateway for militant expansion toward the Gulf of Guinea.
Market Implications: Sub-Saharan African markets are trading with a wider risk premium and stronger country differentiation following the IMF’s April downgrade of regional 2026 growth to 4.3%, driven by the Iran war commodity shock and what the Fund described as an unprecedented aid withdrawal in speed, scale, and uncertainty. Frontier sovereign spreads, fiscal flexibility, and import-dependent economies face the most direct pressure through elevated fuel, fertilizer, and shipping costs, while gold and oil exporters retain relative support from higher commodity prices. Security risk is a parallel transmission channel, with Africa Corps deployments in the Sahel proving insufficient to stabilize Mali, Burkina Faso, and Niger against advancing JNIM and Islamic State Sahel Province insurgencies, undermining the Russian stabilization narrative and raising risk premia for Sahel sovereign debt, mining logistics, insurance costs, and infrastructure execution around gold, lithium, and uranium assets. The AfDB Annual Meetings in Brazzaville from May 25 to 29 and the broader push to deepen the African Continental Free Trade Area represent the primary constructive offset, alongside U.S. re-engagement with Guinea’s bauxite sector as part of Washington’s critical minerals diversification drive.

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