African nations are likely to weather recent aid cuts and trade strains without widespread credit downgrades, Fitch Ratings said Thursday.
Despite pressure from a U.S. aid freeze and rising global trade tensions, Fitch views the region’s overall risk as contained and manageable.
Africa’s limited integration into global supply chains and its distinct export makeup have helped shield it from the harsher impacts of tariffs.
Sub-Saharan Africa, a major recipient of U.S. aid, was hit hard after President Donald Trump halted funds from USAID by executive order.
Still, countries like South Africa, Namibia, and Ivory Coast remain relatively insulated from economic aftershocks, Fitch’s Paul Gamble said in a webinar.
Nigeria and Seychelles continue to hold positive credit outlooks, driven by policy reforms that strengthen long-term fiscal resilience.
“The reforms we’ve seen put the region in a better position to absorb some of these shocks,” said Gamble, noting that ratings impacts “look manageable.”
However, Fitch warned that the aid freeze is not without damage, especially for fragile economies reliant on foreign support.
Ethiopia, where U.S. aid covers 80% of foreign exchange reserves, along with Mozambique, Uganda, and Lesotho, faces heightened fiscal vulnerability.
In response, African-owned multilateral banks may gain new relevance as alternative funding sources, Fitch’s Arnaud Louis said.
Meanwhile, Washington’s growing interest in Africa’s mineral wealth could spark new trade friction with China on the continent.
“Africa will be a playing field for U.S.-China tensions,” Gamble said, citing a shift in U.S. policy toward resource-focused, transactional engagement.
The Trump administration has pledged investment in the Democratic Republic of Congo, where China currently dominates critical mineral mining.