Executive Summary:

Africa is confronted by significant headwinds from the global fallout of the extended Strait of Hormuz blockade and downstream effects to global trade and critical industrial imports such as fertilisers and energy. Inflationary pressures grip the African continent revising inflation forecasts up in the near-term as countries prepare various policies to negotiate and buffer geopolitical shocks.

Nigeria, Kenya, and Ghana share a common global geopolitical backdrop: the surge in oil, fuel and energy, and fertiliser prices. Each country addresses the changing global market from structurally different positions: Nigeria is simultaneously an oil exporter and a refined-fuel importer with a new growth in domestic refining capacity, leading to ongoing moderate exposure to global oil shocks; Ghana is a net importer shielded by record gold export earnings and efforts to increase domestic gold value addition and diversify energy and agricultural imports; and Kenya bears the full import-side shock with few commodity buffers with increasing focus on FinTech sector leadership to increase Foreign Exchange access. Countries face a revised inflation forecast upwards pricing in increased energy, oil, and imports 15%, 3.2%, and 4,4% for Nigeria, Ghana, and Kenya respectively. Nigeria and Ghana push for regulatory policies to boost domestic production and revenue captures, while Kenya approaches the IMF and World Bank for extended loan deals and a domestic tax relief programme to lessen the inflation burden to households. Energy inflation hits all major economic outputs compounding election-cycles, security, and FX shocks through the remainder of 2026.

Across all three, the interaction of global shocks, election-cycle and security pressures, and sector-specific opportunities defines the landscape for the remainder of 2026.

Regional Overview

Geopolitical Risk and Security Profiles – The Hormuz Shock

The effective closure of the Strait of Hormuz has become a defining external variable across Africa and for our three reference economies in April 2026. Brent crude peaking above $115 per barrel has, however, produced sharply different consequences depending on each country’s oil and non-oil dependency, energy position, and economic structure.

Nigeria: Windfall Constraints

Nigeria is the only one of the three countries that stands to benefit from elevated oil prices, but structural constraints are intercepting much of the upside. Oil production came in at 1.48 million barrels per day in April 2026, which was its OPEC quota (1.5mbpd). A further estimated 300,000 barrels are encumbered due to existing financial obligations, withholding revenue gains and structuring potential oil windfall. At $115 per barrel, every barrel not produced represents approximately $51 of lost daily revenue. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) report on Domestic Crude Supply Obligation (DCSO) for Q1 2026 shows that the 61.9 million barrels of crude oil domestic refineries supply target greatly exceeded the actual supply volume of 28.5 million barrels, a supply conversion rate of 46%. On the FAAC federation account, the March pool grew only 7.5% reflecting the low supply conversion rate, pipeline losses, and crude-for-crude swap obligations.

The Dangote Petroleum Refinery commenced commercial operations in January 2024 and reached full-capacity in 2026 with ~99% utilisation average of its 650,000 bpd nameplate capacity throughout April 2026.. As domestic refining displaces imported fuel, dollar outflows on fuel imports  that have historically pressured the naira could begin to ease. The World Bank’s earlier warning of an oil price surge of 3.1 percentage points to headline inflation is a live risk but Dangote’s production ramp-up provides a partial structural offset that could strengthen FX reserves and oil inflation revenue capture.

Ghana: Import Pain, The Gold Cushion

Ghana imports approximately 95% of its refined petroleum and has no meaningful domestic refining capacity, placing it firmly on the wrong side of an $115 Brent price. Oil inflation impacts Ghana’s energy import dependency and exposed the logistics, constructing, and agricultural sectors. The World Bank estimate of a 3.1 percentage-point inflation risk sits on top of a 3.2% March inflation reading. The estimate risks eroding record-low inflation rates achieved through 15 months of gold-backed fiscal policy. Ghana’s currency appreciated more than 40% against the US dollar in 2025, driven by record gold export earnings of approximately $20 billion. Currency gains reduce the local-currency cost of dollar-denominated fuel imports, functioning as an automatic partial insulator that neither Nigeria nor Kenya can currently match. Ghana Mineral Commission’s April 2026 statement continues to enforce greater local ownership of gold production with compliance sanctions on three international mine operators by December 2026 if licences are not transferred locally. Gold continues to perform with global demand surging and central banks leading global gold stockpiling, acting as Ghana’s central buffer and regulatory priority to offset global geopolitical exposure. The same gold revenues that built $13.8 billion in foreign exchange reserves therefore are now funding the buffer that protects the disinflation gains from a global geopolitical shock beyond Ghana and Africa’s reasonable control. Gold’s capacity to dampen geopolitical instability is further being challenged from Q1 highs as Central Banks globally pursue contractionary monetary policies.

Kenya: Full Import-Side Exposure, Multiple Sector Impacts

Kenya faces the Hormuz shock with the least structural protection of the three. The average landed cost of diesel surged 68.72% between February and March 2026, and kerosene, critical for low-income household cooking, rose 105.15% over the same period. The government deployed KSh 6.2 billion from the Petroleum Development Levy Fund and cut VAT on fuel from 16% to 13%, preventing steeper pump price rises but at a fiscal cost of approximately KSh 13 billion in foregone revenue.  The Kenyan government also pursued significant drawdown (about $430 million) from foreign exchange reserves to stabilise the shilling. Beyond fuel, the fertiliser disruption moving through the same corridor poses a structural agricultural risk: Kenya is classified as medium-to-high risk for fertiliser shortages, with urea prices up more than 40% from pre-conflict levels. Price inflationary disruptions at the start of the planting season carries consequences that outlast any single pricing cycle with knock-on effects expected into the election cycle.

The Hormuz shock exposes the structural difference between the three economies: Nigeria faces a constrained opportunity, Ghana faces mitigated risk, and Kenya faces an exposed risk. Decisions made in the next 8 to 10 weeks — on fiscal intervention, monetary policy, and agricultural input procurement — will determine which of these trajectories stays manageable and which compounds affecting various sectors and in-country opportunities.

Nigeria

Inflation

Headline inflation rose to 15.38% year on year in March 2026 from 15.06% in February, ending eleven consecutive months of disinflation and marking the first reversal since March 2025. The Consumer Price Index rose to 135.4 points from 130.0 in February, a 5.4-point increase. On a month-on-month basis, the pace of acceleration was the more alarming signal: headline inflation surged to 4.18%, more than double February’s 2.01% and the steepest monthly increase since January 2025.

Food and non-alcoholic beverages were the dominant driver, contributing 5.55 percentage points to the headline figure and rising to 14.31% year on year. Transport contributed 1.80 percentage points as fuel and logistics costs passed through to road freight and distribution. Core inflation stood at 16.21% year on year in March, while rising 4.03% on a monthly basis, indicating that price pressures had broadened well beyond food into services and non-food goods. The rebound in food prices partly reflects insecurity in food-producing regions, elevated logistics costs, and the seasonal transition from harvest to planting.

.A likely second consecutive month increase based on the steady inflation of fuel prices through April as a result of the Hormuz blockade and downstream transport coststhough the NBS methodology revisions introduced in 2026 add some uncertainty to the precise headline figure. The broad direction is, however, unambiguous: Nigeria’s eleven-month disinflation tailwind has reversed, and the CBN faces materially more constrained policy space heading into the May MPC meeting.

Monetary Policy

The CBN’s Monetary Policy Committee cut the Monetary Policy Rate by 50 basis points to 26.50% at its February 24, 2026 meeting, the second cut in six months following the 50 basis point reduction in September 2025. Governor Cardoso framed the February decision as recognition that eleven consecutive months of declining inflation had sufficiently anchored expectations, creating space for gradual easing to support credit expansion and real sector growth. Those conditions have since reversed.

The next MPC meeting is scheduled for May 19–20, 2026 (the 305th meeting). With headline inflation now rising again, the March month-on-month acceleration at 4.18% the steepest since January 2025, and Gulf crisis energy pass-through yet to fully land in official data, ACIOE assesses a rate hold as the firm base case. The asymmetric corridor remains at +50/-450 basis points. The Cash Reserve Ratio is held at 45.0% for commercial banks and 16.0% for merchant banks, with the Liquidity Ratio at 30.0%. The CBN’s CRR-constrained liquidity stance provides a structural brake on premature credit loosening even as headline rates have begun to ease.

Critically, the CBN’s own PMI index recorded a reading of 49.4 in April 2026, the first contraction after 16 consecutive months of expansion, signalling that monetary transmission is encountering headwinds from external cost shocks. The Stanbic IBTC PMI painted adivergent but complementary picture: at 52.4 in April (up from 51.9 in March), private sector activity remains in expansion, but companies raised selling prices to their highest level since December 2024 in response to rising fuel and raw material costs, indicating that inflationary pressures are being passed through to end consumers.

FX and External Reserves

The naira traded within a range of approximately N1,343–N1,400/USD through April 2026 on the NFEM, closing the month at approximately N1,367/USD. The parallel market premium narrowed to approximately N39 by early April, one of the lowest spreads on record, reflecting the structural improvement in FX market transparency following the 2023-2025 reforms. CBN Governor Cardoso noted at the National Economic Council in February that speculative dollar hoarding had become loss-making at current spreads.

Gross external reserves declined from US$49.29 billion at end-March to US$48.37 billion by April 29, a further US$0.92 billion contraction even as Brent crude averaged above US$103/bbl through April 2026. The drawdown reflects ongoing supply conversion below NUPRC allocations compounded by foreign portfolio outflows and periodic interventions by the CBN. Portfolio inflows accounted for approximately 85% of total capital inflows in the first nine months of 2025 and supplied 53% of FX liquidity in January 2026, leaving the market disproportionately exposed to risk-off reversals.

Oil Sector and Fiscal Position

Nigeria’s crude oil and condensate production averaged an estimated 1.40 mbpd in April, a marginal improvement from the 1.38 mbpd recorded in March 2026 per OPEC data. Production remains below Nigeria’s OPEC quota of 1.5 mbpd and materially below the 1.84 mbpd budget assumption, with structural constraints capping output. Stanbic IBTC projects full-year 2026 crude output (including condensates) to average approximately 1.70 mbpd.

On pricing, Brent crude averaged approximately US$103/bbl in March and remained above US$99/bbl through much of April, sustained by Strait of Hormuz disruptions. The April FAAC distribution (March revenues) confirmed that Petroleum Profit Tax, Hydrocarbon Tax, and oil and gas royalties all declined considerably despite the elevated Brent price, requiring a N200 billion augmentation to reach the N2.036 trillion distributable total. Executive Order 9 (effective February 13, 2026), which ended NNPC’s 30% management fee and 30% frontier fund deductions, is designed to close this gap.

Private Sector Activity

Private sector activity accelerated marginally in April 2026. The Stanbic IBTC Bank Nigeria PMI rose to 52.4 from 51.9 in March, marking the third consecutive month above the 50-point expansion threshold. Customer numbers and market demand strengthened, with purchasing activity increasing for the seventeenth consecutive month. Business sentiment improved, with half of all survey respondents projecting output increases over the next 12 months. Stanbic IBTC maintained its 2026 GDP growth forecast at 4.22% year on year, up from 3.87% in 2025.

However, the cost environment deteriorated sharply. Companies raised selling prices to their highest level since December 2024, citing elevated energy costs. Staff costs also rose modestly as firms lifted wages to cushion employees against rising transport expenses. The CBN’s own PMI registered 49.4 in April, falling below the 50-point threshold for the first time in 16 months, providing a counterpoint to the Stanbic IBTC reading and reflecting the divergent impact of cost shocks across different segments of the economy.

Ghana

Inflation

Ghana’s annual inflation rate rose marginally to 3.4% in April 2026, according to data released on May 7, 2026 by the Ghana Statistical Service (GSS). The April reading marks the first uptick since January 2025, breaking a 15-month downward trend, though the increase of 0.2 percentage points from 3.2% in March remains modest and the overall level is still historically low relative to Ghana’s recent inflationary history.

The Consumer Price Index for April 2026 stood at 267.3, up from 258.6 in April 2025. On a month-on-month basis, prices rose 1.0% between March and April, the strongest monthly increase since February 2025 and up from 0.1% in March, as inflationary pressures start to register in downstream consumer goods.

Diverging trends within the index tell the more important story. Food and non-alcoholic beverage inflation eased further to 2.2% from 2.3% in March, providing continued relief to households. Non-food inflation, however, accelerated to 4.2% from 3.9%, driven principally by transport and housing costs. Services inflation rose sharply to 9.6% from 7.2%, making it the fastest-rising component — the GSS noted that ‘services such as transport, education, and hospitality are increasingly driving price pressures.’ The petrol (+15%) and diesel (+19%) fuel price increases from the Gulf crisis-linked supply disruption are feeding into the food, services and transport components with some lag, consistent with inflationary trends in Nigeria and Kenya.

Monetary Policy

The Bank of Ghana cut its policy rate by 150 basis points to 14.0% at its March 18, 2026 MPC meeting, the most aggressive single cut among the three economies in Q1 2026. The decision was anchored in sustained disinflation, strengthening macroeconomic buffers, and improved financial conditions. Governor Emmanuel Addison highlighted the IMF programme’s stabilisation framework as the enabling environment for the Bank’s easing confidence. The policy rate has now declined from 27% at end-2024 to 14.0% with average lending rates falling from 30.2% to 17.7% over the same period.

Banking sector conditions reinforced the case for continued easing. The non-performing loan ratio declined to 18.7% in January 2026 from a year earlier, pointing to gradual improvement in asset quality. Private sector credit growth accelerated sharply to 28.1% year on year in March, signalling that monetary transmission is gaining strong traction and that demand for credit is recovering alongside improving macroeconomic conditions. Average lending rates at 17.7% represent a substantial improvement from the crisis-era peaks above 30%.

The April inflation increase to 3.4% introduces a modest complication but does not materially alter the easing trajectory. With headline CPI still more than 10 percentage points below the policy rate, Ghana maintains the widest real rate buffer of the three economies. A further rate cut at the next MPC meeting is plausible if the disinflation trend resumes in May, though the Bank will likely assess whether the April uptick is transitory (fuel pass-through) or more persistent before committing to a further reduction.

Oil Sector and Fiscal Position

Petrol rose approximately 15% and diesel approximately 19% in the affected pricing cycle, and the April inflation data confirms these increases are beginning to transmit into transport and services costs.

Fiscally, Ghana’s position is the strongest of the three economies. The commitment-basis fiscal deficit narrowed to 1.0% of GDP in 2025 from 5.2% in 2024, while the primary balance moved into a surplus of 2.6% of GDP. The public debt ratio has declined from 62.5% of GDP to approximately 45%, reflecting the Domestic Debt Exchange Programme restructuring and subsequent stabilisation. The IMF programme remains on track, providing a credibility anchor for fiscal and monetary discipline. The Majority in Parliament cited these gains as evidence that ‘the work has been done’, though the sustainability of consolidation gains through the 2027 electoral cycle remains an open question.

Private Sector Activity

Ghana’s private sector performance in April 2026 reflected the broader stabilisation narrative. Private sector credit growth at 28.1% year on year in March represents a strong expansion of available credit, consistent with falling lending rates and improving macro conditions. The Bank of Ghana’s broader digital finance agenda — expanding into digital credit and embedded finance — is broadening access to financial services beyond traditional payment infrastructure. The Nairobi Securities Exchange analogue in Ghana, the Ghana Stock Exchange, continued to benefit from lower interest rates and improving investor confidence. Government investment in mining, agriculture, and energy infrastructure continues to support sentiment on production activity.

Kenya

Inflation

Kenya’s annual inflation rate surged to 5.6% in April 2026, up from 4.4% in March, according to figures from the Kenya National Bureau of Statistics (KNBS). This marks the fastest pace of price growth in two years, the first reading above the Central Bank of Kenya’s 5.0% midpoint target since mid-2024, and a striking reversal from the trajectory that had seen inflation hold comfortably at the lower end of the 2.5-7.5% target band for the preceding twelve months. The KNBS characterised April’s increase as broad-based rather than isolated, driven by rising prices across food and non-alcoholic beverages, transport, and housing.

The Stanbic Bank Kenya PMI cost data corroborates the CPI reading with force: the overall rate of cost inflation among surveyed businesses soared to its highest level since December 2023 in April, with approximately 18% of survey respondents reporting a month-on-month rise in expenses. Higher fuel prices were the principal driver. Government fuel procurement interventions provided a partial buffer at certain retail points through March, but downstream impacts intensified through April as intervention capacity was tested.

With cost inflation at a December 2023 high across the private sector, the second-round risk of fuel costs embedding into wages, rents and service prices is real and warrants close monitoring.

Monetary Policy

The Central Bank of Kenya retained the Central Bank Rate (CBR) at 8.75% at its April 8, 2026 meeting, pausing the easing cycle for the second consecutive meeting. The decision predated the April inflation release but was anchored in caution over the second-round effects of rising international oil prices. With the April CPI now confirmed at 5.6%, above the CBK’s 5% Midpoint, the hold position is validated and the bar to any further near-term cut has risen materially.

Private sector credit growth continued to recover, reaching 8.1% year on year in March 2026 from 7.4% in February, the strongest reading in more than two years and a sharp recovery from the -2.9% contraction recorded in January 2025. This signals improving monetary transmission and recovering business appetite for credit. However, the non-performing loan ratio edged higher to 15.6% of gross loans in March from 15.4% in December 2025, driven by the personal and household segment — indicating that asset quality pressures have not fully abated even as credit conditions ease. The PMI data adds a further nuance: firms increasingly favoured short-term and flexible hiring arrangements over permanent employment in April, a leading indicator of tightening business conditions that may eventually feed into credit demand.

With April inflation at 5.6%, the PMI in contraction for a second consecutive month, and cost inflation at a two-year high, the CBK is in a classic emerging market bind: inflation above target warrants caution on easing, but private sector weakness argues against tightening. The forecast Monetary Policy hold stance internalises these market challenges.

FX and External Reserves

The Kenyan shilling maintained its remarkable stability through April 2026, trading at approximately KSh 129/USD representing a twenty-two month hold reflecting adequate reserve buffers, resilient remittance inflows, active CBK FX market management, and a narrowing of the parallel premium to negligible levels following the 2025 FX market reforms.

Gross foreign exchange reserves stood at approximately US$13.226 billion on April 29, equivalent to 5.6 months of import cover, comfortably above the CBK’s statutory minimum (4 months). Remittances provided continued support, with February 2026 inflows of US$412.7 million representing an 8.0% year-on-year increase. However, the Middle East represents a significant portion of Kenya’s remittance corridor, and the ongoing Strait of Hormuz disruption introduces a credible near-term downside risk to inflow volumes. Kenya’s Eurobond yields rose sharply through March and April, tightening external financing conditions even as domestic liquidity remained broadly orderly.

The current account deficit widened to an estimated 2.4% of GDP in the twelve months to February 2026, from 1.3% a year earlier, as oil import costs rose and remittance growth was insufficient to offset the deterioration. A sustained oil price above US$100/bbl would widen this further, increasing Kenya’s external financing requirements in an environment where Eurobond spreads are already elevated.

Oil Sector and Fiscal Position

Kenya is a net oil importer, and the sustained Brent crude price above US$99-103/bbl through March and April 2026 has been a highly consequential macroeconomic development for the economy driving inflation, widening the current account deficit, and compressing private sector margins. Landed fuel prices increased 41% from February to March driven by Hormuz blockade shocks and passing on significant inflationary shocks to Kenyan consumers and producers. Kenya’s Treasury and Parliament used emergency measures to halve VAT on petrol to July 2026, with legal authority to extend a further three months. Kenya’s Government also deployed KSh 6.2 billion from the Petroleum Development Levy Fund bringing pump prices down from record highs (> KSh 200).  Government procurement challenges provided a limited buffer, with their effectiveness further constrained by fiscal capacity and the duration of the disruption. These policy buffers also increase fiscal pressures in-country with continued blockade strains likely to increase the 2026 deficit and further restrict GDP growth.

Fiscally, Kenya enters Q2 2026 with the deficit tracking toward approximately 5.0-5.3% of GDP for FY25/26, meaningfully above the government’s 4.8% target, as oil-related expenditure pressures and reduced revenue buoyancy weigh on the budget position. Debt servicing is consuming approximately a third of government revenue, leaving limited fiscal space for counter-cyclical support even as the private sector contracts. Kenya’s statistics office forecasts GDP growth of 4.9% for 2026, though this projection pre-dates the April PMI contraction data and the 5.6% inflation print. The IMF prices in these fiscal pressures in April 2026, revising GDP growth in Kenya down to 4.4% from 4.9%.

Private Sector Activity

The Stanbic Bank Kenya PMI rose to 49.4 in April from 47.7 in March – an improvement in pace of deterioration, but a second consecutive month below the 50.0 expansion threshold. This back-to-back contraction represents a meaningful deterioration from the 50.4 reading in February, which was itself the first expansion since August 2025. Kenya’s private sector is now the weakest performer among the three economies in April 2026, a sharp contrast to its position of relative stability through H2 2025.

Output and new orders contracted for a second consecutive month, led by weakness in wholesale and retail trade, agriculture and services. Businesses widely attributed weaker sales to reduced customer spending power as higher fuel costs eroded purchasing power – a classic demand destruction dynamic driven by an energy price shock. Despite softer demand, purchasing activity continued to expand for a seventh consecutive month, though at its weakest pace in that run, as companies build input stocks in anticipation of further price rises and supply shortages.

Employment grew for the fifteenth consecutive month though firms increasingly favoured short-term and flexible hiring arrangements over permanent positions to manage cash flow under cost pressure. Business confidence slipped for a third consecutive month but remained broadly positive, with approximately 18% of panellists forecasting output expansion over the next 12 months. The combination of a 5.6% CPI print and a 49.4 PMI reading in the same month constitutes a mild stagflationary signal for Kenya that the CBK will be watching closely

Country Buffers & Sector Opportunities

Despite the common external pressures, each country possesses distinct structural advantages and reform catalysts that offer real opportunities for investors, sector operators, and development partners with the right positioning and timeline.

Nigeria: Reform Architecture & Downstream Energy

The appointment of Taiwo Oyedele as Finance Minister on April 21 is a notable economic governance change. Oyedele designed the VAT restructuring, federal-subnational revenue harmonisation, and the non-oil revenue architecture that underpins the growth in tax collection now visible in NBS data. Having the architect of those reforms in direct executive control of implementation removes a critical layer of institutional friction. For financial services and fintech operators, the CBN-NCC Telecoms Identity Risk Management System MoU and the May 1 failed-transaction reporting directive signal a maturing regulatory posture with real compliance timelines. For downstream energy and manufacturing, the Dangote Refinery commercial launch (at 40–45% of 650,000 bpd nameplate capacity) is a significant structural shift in Nigeria’s energy sector. At full capacity, analysts estimate over $3 billion in annual fuel import savings, with direct FX reserve and inflation relief. The NNPC crude supply arrangement remains unresolved and is the critical feedstock variable to track in Q2 and Q3 2026.

Sectors to watch in Nigeria: Financial services (payments compliance, fraud prevention infrastructure); downstream energy (Dangote supply chain, logistics); manufacturing (diesel cost relief timeline); non-oil agriculture exporters benefiting from improved FX and tax reform clarity.

Ghana: Gold, Domestic Refining & Value Chain Development

Ghana’s most consequential strategic opportunity is the transformation of gold from a raw export commodity into a domestic value-creation engine. GoldBod, established under the Ghana Gold Board Act 2025, is the institutional vehicle for this transformation. It generated $10 billion in export revenues through formalised artisanal mining flows in 2025 alone, redirecting gold that previously moved through informal UAE intermediaries into official channels. On the 30th April 2026, Ghana’s first 100% indigenous Gold Mine, Damang Gold Mine Ltd, achieved the milestone of selling 100% of its gold output to the Ghana Gold Board. GoldBod acting on behalf of the Bank of Ghana boosts Ghana’s sovereign gold reserves and foreign reserve accumulation capacity under the Ghana Accelerated National Reserve Accumulation Programme (GANRAP). The January 2026 refining agreement with Gold Coast Refinery, with South Africa’s LBMA-certified Rand Refinery as technical partner, is the first step toward domestic value addition. The deeper opportunity lies not in thin refining margins but in three adjacent benefits: (i) Ghana gaining independent gold assaying capability, ending the historical dependence on foreign refineries to determine the value of its own gold; (ii) LBMA accreditation, which unlocks access to premium global markets; and (iii) a downstream ecosystem in logistics, financial products, jewellery manufacturing, and silver recovery. For financial services firms, gold-backed lending, savings instruments, and collateralised products represent an underdeveloped market being created by GoldBod’s formalisation. For development partners and agricultural investors, the same Hormuz shock creating energy risk is also disrupting global fertiliser supply chains: Ghana’s medium-to-high fertiliser shortage risk requires active input procurement strategy for the current planting season beyond the April 2026 Morocco fertiliser partnership announcement.

Sectors to watch in Ghana: Gold refining and certification (logistics, assay labs, chain-of-custody technology); gold-backed financial products (banking, fintech); agricultural input supply chains; IMF post-programme fiscal framework as the guardrail on fiscal discipline beyond 2026.

Kenya: Digital Finance, Stablecoins & the M-Pesa Extension

Against the challenging macroeconomic and political backdrop, Kenya’s digital finance sector is offering structural momentum that is genuinely differentiated from the rest of the continent. The Virtual Asset Service Providers Act, signed into law in October 2025 and now being operationalised through the Draft VASP Regulations 2026, represents one of the most comprehensive digital asset frameworks in Africa. The framework’s stablecoin provisions (requiring KES 500 million minimum paid-up capital, 100% backing of current liabilities, and at least 30% of customer funds held in Kenya-domiciled bank accounts) are architecturally significant: they anchor stablecoin stability within the domestic financial system rather than relying on offshore instruments. Approximately $500 million in monthly stablecoin transactions already circulates in Kenya beyond traditional rails. USDT usage grew 18.6% year-on-year in 2025. Approximately 50 virtual asset firms are in discussions about establishing regional headquarters at the Nairobi International Finance Centre. The Kenya Blockchain and Crypto Conference on May 14–15 which is set to draw SWIFT, OKX, VALR, Luno, Tether, and CBK and CMA officials is the most important industry signalling event before the final regulations are published. The convergence of stablecoins with M-Pesa infrastructure represents one of the principal financial inclusion opportunities on the continent: extending the domestic mobile money logic that made M-Pesa transformative into cross-border, 24/7 settlement at a fraction of correspondent banking costs.

The risk in the current Kenyan framework emerges in regulatory maturation. The CBK-CMA dual oversight structure risks producing regulatory arbitrage gaps if the two agencies do not achieve genuine operational coordination before the regulations are finalised. Firms entering the market now, during the consultation phase, have outsized influence over the environment that emerges.

Sector Spotlights

Sector highlights and comparative analyses:

Financial Services & Fintech

Nigeria, Ghana, and Kenya are simultaneously tightening financial regulation and opening new market categories. Nigeria’s CBN-NCC Telecom Identity Risk Management System (TIRMS) platform and mandatory failed-transaction reporting create near-term compliance obligations for fintechs and payment operators but also establish infrastructure that improves fraud prevention at scale. Ghana’s GoldBod ecosystem is creating demand for gold-backed financial products, assay services, and trade finance instruments. Kenya’s VASP framework, if well-coordinated between CBK and CMA, positions the country as the leading regulatory-compliant digital asset hub in East Africa. For international financial services firms evaluating Africa market entry, the regulatory clarity in Kenya and the reform momentum in Nigeria represent the clearest entry signals of the past three years.

Agriculture & Food Security

The fertiliser disruption is the most operationally urgent cross-country issue for agri-sector partners. Ghana and Kenya face medium-to-high shortage risk; Nigeria is a net urea exporter (urea exports to Brazil were a leading non-oil export in Q4 2025) and is partially insulated. For organisations with smallholder, food systems, or agri-value chain programmes in Kenya or Ghana, the current planting season requires immediate input procurement decisions – the window to intervene before delayed planting affects Q3 and Q4 food prices is measured in weeks. Agricultural financing instruments, precision input delivery platforms, and market-linkage tools are high-demand, near-term opportunities for development finance institutions.

Healthcare, Development & Infrastructure

Election-cycle spending in Nigeria and Kenya creates both near-term opportunity and medium-term risk for development partners. Nigeria’s supplementary budget request of ₦2.48 trillion includes substantial social investment and infrastructure lines. Kenya’s government is deploying fuel subsidy spending under fiscal pressure while managing pre-election infrastructure commitments. Programmes dependent on government counterpart funding need to be reassessed against tightening fiscal space, particularly in Kenya where the budget deficit has widened to 6.4% of GDP. Organisations with healthcare delivery programmes should factor fuel and cold-chain logistics cost increases directly into operational budgets for the remainder of 2026. In Ghana, the IMF programme’s post-2026 transition and the Fiscal Responsibility Framework will determine the government’s co-investment capacity.

Manufacturing & Local Exporters

For manufacturers, the key near-term variable across all three countries is diesel cost and availability. Nigeria’s Dangote refinery ramp-up provides a medium-term relief pathway that is not available to Ghana or Kenya, but transmission from refinery gate to industrial diesel pricing will take months. Ghana’s gold-driven cedi strength benefits importers of machinery and inputs but reduces price competitiveness for manufactured exports priced in cedis. Kenya’s non-oil exporters, particularly tea, coffee, horticulture, and apparel, face margin compression from energy and fertiliser input cost increases even as their dollar-denominated earnings hold. For local exporters across all three countries, the stablecoin settlement infrastructure emerging from Kenya’s VASP framework offers a genuine near-term reduction in cross-border FX conversion costs and settlement delays.

Outlook — Key Indicators for Q2 to Q4

The following indicators will continue to highlight policy responsiveness to the changing global political economic shocks, domestic political cycles, and sector-specific reform agendas.

Key Q2 Indicators for Africa’s 2026 Outlook

• Nigeria FAAC distribution vs. debt service ratio: an indicator of whether the oil price windfall is reaching the federation account or being absorbed by structural inefficiencies.
• Ghana transport and fuel CPI sub-index vs. headline: an indicator of real vs nominal impacts of Hormuz-caused inflation after national economic buffers are accounted for.
• Kenya May fuel pricing cycle: an initial indicator of the intention of the Kenyan Government to pass on to consumer or absorb inflationary challenges and a precedent for the political approach to the electoral policy-cycle.
• Ghana LBMA certification timeline for Gold Coast Refinery: a milestone framework for Ghana Gold refinery and mining sector policy maturity.
• Kenya VASP final regulation: the degree of CBK-CMA operational coordination achieved before publication will determine the compliance cost and predictability of the digital asset operating environment.
• Nigeria NNPC-Dangote crude supply arrangement: this still unresolved feedstock negotiation will be a key indicator of the refinery’s expected production impacts on the country.