Africa’s export-driven economies remain exposed to global market shocks, with the continent’s key commodity index falling 1.4% in the first half of 2025, according to the Afreximbank African Commodity Index (AACI). The modest decline masked sharp volatility, with the index peaking at 207.2 in January before dropping to 185.6 in May, closing the period at 191.1.
The drop was largely driven by weaker crude oil and agricultural prices, despite a historic 25% rally in gold, the metal’s strongest first-half performance in 50 years. The precious metals sub-index jumped from 244.6 to 305.7, as geopolitical tensions, central bank buying, and a weaker U.S. dollar fueled safe-haven flows.
By contrast, the energy sub-index slipped over 6% as oil prices slumped amid oversupply concerns, despite a rebound in natural gas. Agricultural commodities posted the sharpest losses, falling 12.5% due to strong harvests, improved weather conditions, and lower demand in key markets.
“The volatility reinforces the continent’s structural dependence on raw commodity exports,” the report noted, calling for faster value addition, regional integration, and risk mitigation mechanisms.
Precious Metals Outperform
Gold led the commodity rebound as investors sought safety amid global uncertainty, while cobalt rallied on tight supply and increased demand from battery manufacturers. However, Afreximbank warned that Africa still captures limited value from its dominance in gold and cobalt production due to a lack of local refining and beneficiation capacity.
Oil Weakness Exposes Energy Risks
The oil market remained under pressure throughout H1, with global oversupply driven by increased Russian, Iranian, and non-OPEC output. Seaborne crude volumes hit their highest levels since April 2024. Meanwhile, natural gas markets tightened in Q1 amid cold weather, but softened by mid-year as LNG demand eased.
Despite its reserves, Africa imports 80% of its refined petroleum, exposing economies to foreign exchange risks and supply shocks. The report calls for more investment in refining capacity and regional infrastructure to buffer against external oil price swings.
Agriculture Falters on Surplus Supply
Africa’s agricultural producers faced headwinds across cocoa, coffee, sugar, palm oil and wheat. Cocoa prices declined on improved arrivals from Côte d’Ivoire and weak grindings data. Coffee markets absorbed surpluses from a 12.1% increase in African output. Palm oil, sugar and wheat were weighed down by global overproduction and softening import demand from Asia and the Middle East.
Despite accounting for 75% of global cocoa output, Africa earns less than 10% of the value chain, underscoring the export bias toward raw products and the need to scale agro-processing.
Base Metals Provide Some Relief
Base metals gained, with the sub-index climbing from 184.4 to 213.8. Copper prices surged on EV and grid infrastructure demand, though African production was constrained by power outages and export delays. Aluminium posted modest gains, while zinc lagged due to weak construction demand and high smelter activity in China.
Long-Term Reforms Needed
Afreximbank stressed that Africa’s continued reliance on primary commodity exports leaves it vulnerable to price shocks and global headwinds. Structural reforms, including industrialisation, regional trade facilitation under AfCFTA, and commodity-backed finance, are needed to shift toward value-added production and reduce macroeconomic volatility.
The AACI’s comparison with the Bloomberg Commodity Index highlights Africa’s greater exposure to downside volatility. Global diversification cushions BCOM’s performance, while Africa’s concentration in oil and soft commodities increases its risk profile.
According to the report, commodity price volatility is expected to persist, driven by geopolitical risks, climate-related supply disruptions, and monetary policy shifts. Afreximbank forecasts a mixed outlook; copper and zinc remain bullish, gold is expected to stay range-bound, while cocoa, palm oil, and sugar face bearish pressure.
The report concludes that unless Africa moves beyond passive commodity price monitoring toward active value chain development, the continent’s economies will remain vulnerable to exogenous shocks, with limited capacity to build buffers or plan long-term.
