Onome Amuge
Commodity-dependent economies across Africa are confronting what could be the most consequential market transition in a generation, as a once synchronised global commodity cycle splits into two distinct paths; one buoyed by the energy transition, industrial reconfiguration and geopolitical shifts, and the other pressured by oversupply, weakening demand and climate-related volatility.
This is the core conclusion of a new analysis by the Africa Export-Import Bank (Afreximbank), which argues that the global economy has moved into a structural new phase that will bring both significant challenges and targeted opportunities for governments across the continent in the decade ahead.
In its November 2025 Commodity Market Insights bulletin, the Cairo-based multilateral lender says policymakers across the continent must confront the reality that markets are no longer moving in unison. According to the bank, commodities with strong undercurrents of long-term demand, such as lithium, aluminium and natural gas, are diverging sharply from softening markets such as cocoa, palm oil, sugar and certain precious metals.
The bank noted that Africa risks falling behind unless governments accelerate diversification, strengthen supply-chain resilience and move rapidly into processing and value addition, ending decades of dependence on raw-commodity exports.
Afreximbank argues that the emerging decoupling in global commodity markets is structural rather than cyclical. The bank points to three forces reshaping international trade and investment patterns. The first is the energy transition and the rapid expansion of electrification, which is driving strong demand for lithium, copper, aluminium and other minerals used in batteries, electric vehicles and power infrastructure. The second is geopolitical fragmentation, which is redirecting trade flows, influencing global capital allocation and heightening vulnerabilities across supply chains. The third is a new form of climate-driven volatility that is altering agricultural productivity and prompting major importers to rethink stockpiling strategies.
Together, these developments have created a global environment in which the traditional model of synchronised commodity markets no longer holds. A decade ago, prices for oil, metals and agricultural goods often rose in parallel. Today they move independently, shaped by divergent structural trends. According to the report, some markets are now supported by persistent long-term demand, while others are weakening as a result of oversupply, changing consumption habits and weather-related pressures. For Africa, which provides more than a quarter of the world’s cobalt, a fifth of its gold and substantial reserves of natural gas, bauxite and manganese, the implications are profound.
Afreximbank’s bulletin identifies a group of commodities that have outperformed in 2025, each reflecting distinct but mutually reinforcing structural trends.
Natural gas has been among the strongest performers, with prices rising sharply compared with 2024. The increase is driven by high winter heating demand, disruptions to global LNG shipping caused by attacks on vessels in the Red Sea, the need to reroute cargoes around the Suez Canal which adds weeks to voyage times and raises transport costs, and constrained upstream supply from the United States, Russia and Qatar. For African LNG exporters, including Mozambique, Nigeria, Senegal and Mauritania, elevated gas prices provide significant fiscal support. Several governments have invested heavily in long-dated LNG projects, and the bank’s analysis indicates that demand may remain resilient for longer than climate models initially projected.
Lithium has emerged as one of the defining commodity stories of 2025. Afreximbank attributes its resurgence to strong demand from electric-vehicle and battery-storage manufacturers combined with supply reductions by major producers. The bank projects lithium carbonate demand to grow 25 per cent year-on-year in 2025, while energy-storage system demand, driven by grid-level battery rollouts, is expected to rise 45 per cent in 2026. Demand from the electric-vehicle sector remains robust despite uneven conditions in global auto markets.
African countries such as Zimbabwe, Democratic Republic of Congo, Namibia, Mali and South Africa, all holders of lithium or allied battery minerals, are projected to see renewed investor interest. Yet Afreximbank warns that exporting raw spodumene or unprocessed ore will no longer be sufficient.
“The next frontier for value retention is processing,” the bank says, urging governments to attract battery-grade refining and cathode manufacturing facilities.
Meanwhile, aluminium is seen approaching multi-year highs on futures markets, supported by strong construction and automotive demand, power constraints at European smelters, policy-driven production caps in China, and supply disruptions at refineries in Iceland and Australia.
Africa is home to several major bauxite exporters, with Guinea foremost among them, and aluminium refiners in Mozambique and South Africa. According to the report, the prospect of a structurally tight aluminium market raises the possibility of larger downstream investments, provided governments can guarantee stable power and infrastructure.
Soybeans: China returns to the market
Soybeans have rallied on strong Chinese purchases and weather concerns across South America. Beijing’s commitment to buy at least 12 million tonnes of US soybeans in late 2025, and at least 25 million tonnes annually through 2028, has tightened global markets.
African exporters such as Nigeria, Zambia, Benin and South Africa could theoretically benefit, but Afreximbank cautions that the continent’s fragmented supply chain and low yields hinder its competitiveness.
According to Afreximbank, oil remains the African commodity heavyweight, representing the dominant revenue source for Nigeria, Angola, Algeria, Libya and Gabon. Prices have stabilised around $60 per barrel after a volatile year shaped by drone strikes on Russian oil infrastructure, tensions in the Middle East, pressure from US sanctions, and muted global demand.
While oil is not part of the “new winners,” Afreximbank believes it will remain fiscally significant for petroleum-exporting African economies, particularly those attempting to fund diversification efforts.
The losers: Cocoa, palm oil, sugar, platinum and silver
At the other end of the spectrum, five commodity markets face sustained pressure. Their declines carry far-reaching implications for African economies heavily tied to agricultural exports and precious metals.
Cocoa prices, which soared to historic highs in early 2024, have retreated sharply on expectations of better harvests in Côte d’Ivoire and Ghana, healthier drying conditions and the replenishment of inventories.
According to the report, for farmers in West Africa, where roughly 70 per cent of global cocoa is produced, the correction threatens household incomes and government tax receivables. After a year of extreme price volatility caused by disease, aging trees and erratic rainfall, a return to more balanced markets could paradoxically depress revenues just as producers were preparing to invest in rehabilitation.
Palm oil markets have softened due to rising output from Malaysia and Indonesia, elevated inventories, sluggish demand from India and China, and a shift toward cheaper vegetable oils. For African producers, including Nigeria, Ghana, Liberia, and Cameroon, the outlook is concerning, as domestic production remains insufficient to meet local consumption and market weakness constrains opportunities for profitable expansion.
Sugar is facing a projected two-million-tonne surplus for the 2025/26 season. A combination of improved weather and weaker ethanol demand in Brazil has pushed prices down. According to Afreximbank, African sugar producers, particularly Egypt, South Africa, Mauritius, Eswatini and Sudan, are likely to confront squeezed margins and intensified competition from low-cost Latin American exporters.
In a similar vein, platinum prices have softened despite strong year-to-date performance, reflecting weaker industrial demand and hawkish monetary signals from the US Federal Reserve. Silver has retreated following profit-taking, although longer-term fundamentals tied to the renewable-energy sector remain supportive.
South Africa, which produces the majority of the world’s platinum group metals (PGMs), faces the challenges of short-term volatility and long-term structural shifts as EV adoption reduces catalytic-converter demand.
Afreximbank issued a warning that African economies must prepare for a world in which neither demand nor prices can be assumed to move in tandem.
The bank argues that governments must reposition their economies across four key areas. First, they must build resilient supply chains. Disruptions in the Red Sea, which have forced LNG and container vessels to reroute, underline the fragility of global trade, and Africa must invest in port modernisation, high-capacity rail links, industrial corridors, storage facilities, and digital logistics networks to reduce vulnerability and position itself as a reliable supplier in volatile markets.
The report further warned that the continent must move aggressively into processing and value addition, as exporting raw materials alone is no longer economically viable in a world of rapidly localising value chains. For agricultural producers, this involves expanding cocoa processing into butter, liquor and powder, refining palm oil and producing oleochemicals, and developing sugar refining and ethanol co-production. For metals and minerals, it requires lithium conversion to battery-grade carbonate, aluminium smelting and fabrication, and copper processing and cable manufacturing. The bank clearly stated that Africa needs factories, not just mines and farms.
Afreximbank urged policymakers to develop robust market-intelligence and early-warning systems, since commodity-dependent economies are often slow to react to price swings. It noted that continent-wide intelligence units monitoring supply shocks, weather risks, geopolitical disruptions, shipping patterns, and futures-market behaviour would enable timely action on stockpiling, hedging, and production planning.
The report also recommended that intra-African trade must be strengthened. It observed that the African Continental Free Trade Area currently accounts for less than 18 per cent of total continental commerce, and deeper regional integration is essential for creating scale, attracting industrial investment, and reducing reliance on volatile overseas markets.
Afreximbank concludes that African governments must adapt quickly to the two-speed global environment or risk being left behind by structural shifts that will shape commodity markets for decades. The bank closes its bulletin on a note of cautious optimism, noting that markets anchored in long-term structural demand are likely to remain resilient even as supply dynamics fluctuate.
