Africa, long seen as a continent of untapped potential, has gained increasing attention from global investors in recent months amidst global tariff uncertainty. With a wealth of natural resources, expanding consumer markets, and improving economic policies, many African nations have long been seen as investment destinations with great, albeit unrealised, potential.
Countries like Egypt, Kenya, Nigeria and others, that were hit by capital flight over the past number of years, enticed investors back in 2024 with tough economic reforms and a return to orthodox economic measures like high real interest rates. Since dropping unsustainable pegs to the dollar, local currency bonds across many of these countries have produced double-digit returns, while stock markets in the region posted strong positive US Dollar returns over the past year.
The positive trend has continued into 2025. Since November’s US election results, the rally in Nigerian, Moroccan and Egyptian domestic assets reflect how “idiosyncratic trades”, or specific bets on countries in recovery are in favour, as investors find it increasingly hard to read how US President Donald Trump’s threats of tariffs will affect more established Emerging Markets. Frontier African markets are less integrated into the US economy than larger EM countries (which produce higher value goods such as automobiles and electrical goods), and with only small surpluses with the US, frontier Africa is not as exposed to noise and uncertainty surrounding tariffs.
An important element to the continued recovery will be extension of the US trade policy, the African Growth and Opportunity Act (AGOA), which is due to expire 30 September 2025. AGOA allows eligible African countries to export over 6,400 products to the U.S. tariff free, making their goods more competitive in the U.S. market. Amidst the Trump tariff uncertainty, the lack of rhetoric on AGOA has been notable (South Africa’s potential exclusion notwithstanding) and could signal Washington’s comfort with many of the current beneficiaries of the trade agreement.
Less than 6% of Egypt’s total exports are to the US but these do span a diverse set of industries including textiles, oil, and agricultural products. Although the impact of a potential change in US trade policy would be somewhat less pronounced on Egypt, its proximity to the Middle East makes it an important ally to both US and Saudi interests, and Trump’s administration is unlikely to want to cause any disruption to its recovery momentum.
Laurium Capital’s investment process focuses on bottom-up fundamental stock picking, and despite being benchmark agnostic, it is telling that more than 21% of the current Laurium Africa Limpopo USD fund is positioned in quality Egyptian stocks, all exhibiting strong earnings momentum and attractive valuations. With February’s inflation rate dropping to 12.8% (from prior reading of 24%), a stabilisation in inflationary pressures potentially paves the way for the Central Bank of Egypt to consider further monetary easing and further support to the domestic recovery.
The Laurium Limpopo Africa Fund is a Section 65 approved investment vehicle and produced +26.9% USD returns in 2024 against the Riscura RealView Africa ex SA total return index benchmark return of +1.9%. The fund is currently +8.4% year to date in 2025 despite market volatility experienced in broader developed markets and against the benchmark return of 13.2%. Laurium also runs an Africa (excl. South Africa) USD Irish UCITS Bond Fund – Laurium Africa USD Bond Fund – which currently has a meaningful exposure to Egypt. The fund aims to capture attractive yields relative to global sub-investment grade issuers of similar credit ratings.
We note that the Laurium Limpopo Africa Fund and the Laurium Africa USD Bond Fund are Section 65 approved investment vehicles.
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