Global credit rating agency Fitch Ratings has said that the ongoing freeze on U.S. foreign aid and rising global trade tensions, including the imposition of tariffs, are unlikely to lead to widespread credit downgrades cross Africa.
The agency noted that the region’s limited integration into global value chains and recent domestic reforms are helping to mitigate the risks.
Head of the Middle East and Africa division at Fitch’s Sovereign Ratings Group, Paul Gamble stated virtually on Thursday that while the freeze on funding from the United States Agency for International Development (USAID) under President Donald Trump’s executive order has disrupted support to some African nations, the broader macroeconomic impact remains manageable for most.
“The reforms that we’ve seen really put the region in a better position to absorb some of these shocks,” Gamble said noting that the impact for the ratings looks manageable.
Fitch emphasized that Africa’s export profile, which is heavily commodity-based and less embedded in global manufacturing supply chains compared to Asia, provides a buffer against direct fallout from tariffs and trade realignments.
Still, some countries are more exposed than others. Sub-Saharan Africa has historically been a key beneficiary of U.S. foreign assistance, and nations such as Ethiopia, Mozambique, Uganda, and Lesotho could experience heightened fiscal pressure due to the abrupt halt in USAID disbursements. Ethiopia, for example, received U.S. assistance equivalent to around 80 per cent of its foreign exchange reserves.
Despite these vulnerabilities, Fitch maintains a positive credit outlook for countries such as Nigeria and the Seychelles. Gamble credited this to ongoing economic and structural reforms, including measures aimed at improving public finance management, exchange rate policy, and investment frameworks.
In contrast, countries like South Africa, Namibia, and Ivory Coast were said to be relatively insulated from the current geopolitical disruptions.
Their diversified economies and more resilient institutions position them better to weather volatility in foreign funding and global trade.
Fitch also highlighted the potential long-term shift in Africa’s geopolitical relevance. Senior Director at Fitch, Arnaud Louis remarked that African-owned multilateral development banks may play a greater role in addressing financing gaps as U.S. support recedes.
Meanwhile, Gamble pointed to a strategic pivot by Washington, noting an increasing U.S. interest in Africa’s critical minerals.
He warned that this could turn Africa into a new arena for strategic rivalry between the U.S. and China, especially in countries like the Democratic Republic of Congo (DRC), which holds vast reserves of cobalt and rare earth minerals used in electric vehicles and electronics.
“Africa will be a playing field for U.S.-China tensions,” Gamble said adding that the U.S. interest is becoming more opportunistic, transactional, focusing on access to minerals and rare earths rather than broad-based development.
The Fitch analysts also cautioned that the region continues to face growing insurgent violence, adding another layer of complexity to economic management and international cooperation in many African countries.
While risks remain, Fitch concluded that Africa’s sovereign credit landscape remains largely stable, supported by reforms, diversification, and the increasing role of regional financial institutions.
