Africa is young, dynamic and rich in resources, but misperceptions obscure its potential and deter investors. That needs to change.
Hanan Morsy is Deputy Executive Secretary and Chief Economist at the United Nations Economic Commission for Africa (UNECA) and is a member of the G20 Africa Expert Panel established under South Africa's G20 presidency.
The world is undergoing a profound shift. Multilateralism is fraying, tariff regimes are increasingly erratic and development aid commitments are wavering.
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Against this backdrop of instability, one question looms large: how will developing nations, especially in Africa, emerge from this inflection point?
There is a choice to be made. Africa can remain a passive observer in global affairs or assert itself as a vital strategic partner in solving the planet's most pressing challenges.
As governments and institutions around the world consider responses to economic uncertainty, climate change, and digital disruption, it is essential that Africa - a continent of 1.4 billion people and home to some of the greatest untapped opportunities in green energy and innovation - is not left behind.
Yet to seize this moment, the world must confront and dismantle the outdated systems and narratives that have long undermined African economies.
These distortions are not abstract; they have real economic costs. As Carsten Staur, chair of the OECD's Development Assistance Committee, recently noted, donors must listen more closely to their partner countries.
Now, with over 60 national elections having taken place in the past year, the time for reflection and action has arrived.
Global effect
Africa is too often defined solely by its risks - real and imagined.
This narrow narrative is not only misleading; it is destructive. It deters investment, stifles growth, and entrenches poverty. The results are stark: millions of children without access to education, families without electricity and communities left vulnerable to droughts, floods, and famine.
The implications reach beyond the continent. Despite having the world's greatest potential for renewable energy, Africa attracts just 2% of global clean energy investment.
That is not merely an injustice, it's a strategic failure. If the world is serious about climate goals, it cannot afford to ignore Africa.
Perceptions also shape financial outcomes. African countries face disproportionately high borrowing costs, with external debt servicing projected to reach $89.4 billion in 2024.
A single credit downgrade can cost billions, money that could be spent on schools, hospitals or solar infrastructure. Worse, African debt is often treated as a monolithic, high-risk asset class, ignoring the continent's economic diversity and stability in many regions.
Consider the ripple effects of political instability: the 2023 coup in Niger led to a 40 basis point spike in Kenyan bond yields, despite the two countries being thousands of miles apart.
Contrast that with Europe, where crises in one nation often lower borrowing costs in another as investors seek safety. This asymmetry reflects not objective risk, but entrenched bias.
Africa's accomplishments rarely make headlines. Morocco's Noor Ouarzazate complex and Egypt's Benban Solar Park rank among the world's largest renewable energy projects.
Seychelles pioneered the world's first blue bond. Off-grid solar innovation in Kenya and Gabon's leadership in carbon markets offer models for sustainable growth. Yet these successes are overshadowed by narratives of instability.
The cost of this misperception is staggering. Africa is estimated to lose $4.2 billion each year due to inflated borrowing costs.
Reframing the narrative is not a communications exercise, it's a fiscal imperative.
Egypt's average bond yield stands at 15%. Thailand's is 2.5%, despite comparable political risks. Correcting these distortions could lower borrowing costs by nearly a full percentage point, unlocking capital that would otherwise be lost to risk premiums shaped more by headlines than fundamentals.
Rewrite the story
To rewrite Africa's economic story, we must act on several fronts.
Firstly, we must improve data and transparency. Risk thrives in information vacuums. Governments, multilaterals, and rating agencies must ensure that robust, transparent, and accessible data informs investment decisions.
Secondly, we must regulate credit rating agencies. These institutions wield outsized power yet often lack methodological consistency. A global or continental body should oversee and, where necessary, challenge unfair ratings that impact the lives of millions.
Thirdly, we need to promote Africa's progress and potential. African nations must amplify their successes, economic reforms, clean energy breakthroughs, and digital innovation. International partners and the media must help rebalance the conversation.
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Next, we must aggregate bankable green projects. Many clean energy initiatives in Africa are too small to attract large-scale investment. Aggregating these at the national or regional level could unlock billions in financing.
Finally, we must collectively shift the global narrative. Media, financial institutions, and development actors must broaden their lens. Africa's stories of innovation, integration, and leadership in climate resilience must become central to the global discourse.
Africa is young, dynamic and rich in resources. It is at the forefront of green transformation and digital innovation. Yet it remains trapped in a narrative that obscures its potential and penalises its progress.
Changing that narrative is not an act of charity. It is an economic and strategic necessity. South Africa's G20 presidency offers an opportunity to reshape the conversation, to highlight investment opportunities, forge new partnerships, and bring Africa to the centre of the global economic agenda.
The question is not whether Africa matters. It does. The question is whether the world is ready to see and support it as an equal partner in shaping our collective future.
