Africa Invest: Q1 2026 Market Commentary

While global indices struggled under the weight of rising Middle East tensions and oil price spikes in late March, the S&P 500 fell roughly 1.7% in the final week of the quarter. African stock markets were busy setting all-time highs, cutting interest rates, and watching their
currencies strengthen. The continent did not move as one, but the direction was unmistakably positive.

Fifteen African central banks held monetary policy meetings in the first two months of the year. Eight of them cut rates, including Kenya,
Egypt, Angola, Ghana, Mozambique, Zambia, Nigeria, and the Democratic Republic of Congo. This easing wave signals something
important: after more than two years of aggressive rate hikes to fight post-pandemic inflation, African policymakers now have enough
confidence to start putting growth back on the agenda. Inflation has cooled in several countries, including Kenya, Zimbabwe, Ghana, and
Zambia. That change in direction matters for investors.

At the same time, African startup ecosystems raised $487.25 million in the first two months of 2026, an 11% increase over the same period in 2025. The composition of that money is shifting, though. Equity capital fell significantly, while debt financing more than doubled. Investors are becoming more selective and more structured. The era of easy venture money may be fading, but the demand for African solutions is not.

The Nigerian Exchange All-Share Index delivered the most dramatic equity story on the continent in Q1 2026. It started the year at 155,613 points and never looked back.

The rally was broad-based. Banking, consumer goods, industrials, and insurance all contributed. Foreign portfolio investors returned in force, with $3 billion in inflows recorded in January alone. What is fueling this? A combination of falling inflation, a more stable Naira, CBN monetary easing (benchmark rate cut 50bps to 27%), banking sector recapitalization, and growing confidence in Nigeria’s macro direction.

South Africa: JSE hits a fresh all-time high

The FTSE/JSE All Share Index hit 126,952 points in February 2026, its highest ever close — driven by industrials, financials, telecoms, and gold miners riding bullion’s extraordinary run. The JSE’s market cap reached approximately $1.48 trillion at the peak. The SARB held its repo rate at 6.75%, noting a stronger rand and falling oil prices, which supported a benign inflation outlook.

Egypt: rate cuts and record reserves

The EGX 30 gained approximately 21.7% in Q1. The Central Bank of Egypt cut policy rates by 100 basis points in February, bringing the overnight deposit rate to 19%. Egypt’s gross reserves hit $52.74 billion at the end of February, confirmed by CBE’s official press release — reflecting its strengthened external position under the IMF programme.

Ghana: the cedi’s quiet comeback

Ghana’s cedi fell from approximately 15.60/$ at the start of the year to 10.95/$ by late March. That movement reflects both the Bank of Ghana’s aggressive easing cycle and improving macroeconomic conditions post-debt restructuring. The GSE Composite Index gained about 28.6% in Q1 2026.

Tanzania: Africa’s best local-currency equity performer

The Dar es Salaam Stock Exchange delivered a 40.65% year-to-date return in local currency — making it Africa’s top-performing exchange by that measure. The Tanzanian shilling strengthened 5.71% against the dollar over the quarter. Tanzania is quietly one of the continent’s most interesting investment stories right now.

The broad theme across African FX in Q1 2026 was appreciation against the US dollar. Of the sixteen major African currencies tracked in our database, most gained or held their ground in the first quarter.

Nigeria’s Naira told a nuanced story. It opened the year near ₦1,543/$ (CBN NFEM average), recovered strongly to ₦1,368.5/$ by February, and pushed below ₦1,350/$ in March, its strongest level since May 2024.Nigeria’s external reserves reached $50.45 billion as of February 16, the highest in 13 years, per CBN data, underpinning Naira stability.

Gold: Africa’s biggest export winner in Q1 2026

Gold had an extraordinary quarter globally, and African producers, particularly in South Africa, Ghana, Mali, Tanzania, and the DRC, were direct beneficiaries.

According to the World Gold Council (gold.org), the LBMA Gold Price PM in USD delivered its strongest January since 1980, surging 14% in the month and closing at $4,982/oz, an all-time high. In February, the price added another 4.8%, with gold touching $5,000/oz briefly before pulling back. By March, prices remained above the $5,000/oz threshold, supported by geopolitical tensions in the Middle East, safe-haven demand, and a weaker US dollar.

For African gold-exporting nations, this matters enormously. South Africa’s JSE rally was partially driven by gold mining stocks. Ghana’s fiscal position benefits from higher gold revenues. The WGC noted that global gold demand hit an all-time high in 2025, and central banks around the world continued buying in Q1 2026, with the People’s Bank of China adding gold for its 15th and 16th consecutive months.

Capital flows: Portfolio money in, FDI still struggling

Nigeria’s capital inflow data illustrates a continent-wide pattern. The country received $6.44 billion in foreign capital inflows in Q4 2025, a 26.6% year-on-year increase. But 85% of that was portfolio investment — treasury bills, bonds, and equities, not long-term foreign direct investment. Nigeria’s FDI for all of 2025 was just $923 million, representing less than 4% of total capital importation.

This mirrors the broader African picture. UNCTAD data shows that Africa’s FDI fell by roughly one-third in 2025 to about $59 billion, even as global FDI rose 14%. Egypt remained Africa’s top FDI destination at approximately $11 billion. Mozambique saw an 80% surge in inflows as major LNG projects resumed. Angola moved back into positive FDI territory after nine consecutive years of net divestments.

The implication is that Africa is attracting financial capital, but not yet the long-term productive capital that builds infrastructure, creates jobs, and drives durable growth. The deals that do exist are increasingly structured and DFI-backed.

Notable deals this quarter
Several transactions defined Q1 2026’s investment landscape:

What the new tax landscape means for you

This section is particularly relevant for domestic and foreign investors with Nigerian equity, bond, or business exposure. Investors seeking to understand Nigeria’s tax on investments, withholding tax in Nigeria, capital gains tax in Nigeria, or how Nigerian tax policy affects stock market returns will find this section directly useful.

Nigeria’s tax environment in 2026: What changed and what it means

Nigeria’s tax landscape shifted materially heading into 2026, and understanding those changes is now a necessary part of any investment decision involving Nigeria.

The CBN banking recapitalization and its tax implications

Nigerian banks are currently undergoing a recapitalisation exercise with a March 2026 deadline. Several banks have raised capital through public offers and private placements – including First HoldCo’s ₦107 billion private placement, which was listed on the NGX in January 2026. For investors who participated in these offers, the tax treatment of any gains depends on the instrument and holding period. Rights issues and bonus shares are subject to specific CGT and WHT treatment under Nigerian law, and investors should confirm this with a qualified local tax adviser.

Global oil price direction. Brent crude climbed to around $112.57/barrel in the final week of March amid Middle East tensions. For Nigeria and Angola, higher oil prices improve fiscal revenue and FX inflows but may increase the cost of things, as these countries are import-dependent. For oil-importing nations like Kenya, Ghana, and Côte d’Ivoire, they create inflationary pressure and erode current account positions.

The rate cut cycle. Eight African central banks already cut rates in Q1. How far does the easing go? If global inflation re-accelerates, rising oil prices could cause some of those cuts to pause or reverse. Watch the CBN, SARB, and CBK closely.

Earnings season on the NGX. The NGX rally has pushed valuations higher. P/E ratios moved from approximately 14.2x in January to 16.1x in February. For the market to sustain momentum, Q1 earnings results need to validate those multiples. Banking, consumer goods, and telecom are the key sectors to watch.

Gold and African producers. Gold above $5,000/oz is transformative for the fiscal positions of West African and Southern African gold producers. Watch for capital allocation decisions, whether mining companies reinvest, pay dividends, or hedge.

Africa’s sovereign bond market. Sub-Saharan African sovereign bond sales reached $5.95 billion in Q1 2026, the strongest start since 2013. Zambia, Kenya, and Côte d’Ivoire have been active. The reopening of international debt markets is positive, but the borrowing cost matters. Watch spreads carefully.