Dear Reader,

Welcome to the latest edition of Frontier Markets News. As always, I would love to hear from you at [email protected] with news ideas, feedback and anything else you find interesting. 

Sent this by a friend? Sign up here to receive FMN in your inbox every weekend.

By Ken Stibler, Noah Berman, Nojan Rostami and Mariel Ferragamo. Executive editor: Dan Keeler

Africa

African Exim Bank to roll out new intra-continental oil financing scheme

The African Export-Import Bank announced a new financing program this week that has the potential to unlock some $14 billion in oil trade for the continent, Semafor reports. The new $3 billion plan seeks to harness the continent’s emerging refining capacity and ease trade between African nations. 

The bank hopes the strategy will reduce Africa’s reliance on imported refined petroleum products, which Afreximbank estimates amounts to $30 billion annually. Refined oil makes up a small proportion of the continent’s exports, with the trade balance as low as $17.5 billion in Nigeria, a major oil producer. In some cases African countries even buy back refined products they originally exported as crude. 

The latest initiative plans to satisfy demand from African countries with low crude oil and refining capacity with products from African countries that have a growing capacity. The bank, which is  the biggest financier of the massive Dangote refinery in Nigeria, plans to create more than 1.3 million barrels per day in refining capacity. 

Blended finance proves its value for African infrastructure funding 

Innovative funding mechanisms bringing together diverse organizations, from governments to philanthropists, are helping attract new investment into African infrastructure projects, according to a group of experts on a panel moderated by FMN’s Editor-in-Chief Dan Keeler at the Milken Institute’s global conference this week.

“There has been a retreat of traditional capital…but new channels are emerging” that bring together development finance institutions, African institutional investors and private capital, Tshepidi Moremong, Chief Operating Officer of Africa 50, said. 

One of the key benefits of the blended structures is that they enable the mobilization of African institutional capital alongside investment from other new sources, such as the Middle East. Among the initiatives shared by fellow panelist Rachel Moré-Oshodi, CEO of infrastructure investor ArmHarith, was a structure incorporating DFI funding that allows pension funds to receive yield during a project’s construction period. 

“We’ve all focused on de-risking projects, but we realized that what they want is liquidity, and that’s what we started solving for,” she said.

Marlene Ngoyi, CEO of the Fund for Export Development in Africa (FEDA), highlighted a project that uses blended finance to fund plug-and-play industrial parks in a number of African countries that are making it much easier for foreign businesses to establish themselves on the continent. V Shankar, CEO of investment firm Gateway Partners, noted that Africa’s capital markets and its banking sector are neither broad enough nor deep enough to fund the continent’s infrastructure needs. “There is no alternative,” he said. “Blended finance is the answer.”

Morocco poised to gain from global trade war

Morocco could be one of the unexpected winners in the ongoing trade war, as foreign businesses, particularly from China, look for ways to sidestep new tariff barriers, the New York Times reports. 

Morocco has free-trade agreements with the EU and the US, and it is seen as an increasingly important connector country between regions. Chinese investment has been growing strongly for several years, with $10 billion already directed to Morocco from Chinese electric vehicle and battery producers. In 2023, Morocco became the biggest exporter of automobiles to Europe. 

The disputed territory of Western Sahara is getting billions in investment as well, as more countries, including the US and France, are recognizing Morocco’s sovereignty over the region. The area is seeing more development via highways, wind farms and tourism as a result. The Dakhla region aims to attract $40 billion in investment by 2040, Bloomberg reports. 

Asia

Pakistan market plunges as conflict with India escalates

The rising risk of war with India took a toll on the Pakistani market this week, with the country’s benchmark stock index continuing its downward slide since a gunman killed 26 tourists in India-administered Kashmir last month. 

Tensions with India have worsened since then. New Delhi struck nine targets in Pakistan on Wednesday, Mint reports, bringing Pakistan’s death toll since the conflict began to 31. By Thursday, Pakistan’s KSE index, which had been one of the best performing worldwide over the past year, had fallen 15% from its April peak, leading authorities to briefly halt trading. The index recovered some of its losses on Friday. 

As FMN was going to press, news was emerging that the two countries have agreed to a ceasefire.

If the ceasefire holds, the news will be welcomed by investors. After stagnating for a decade, the KSE nearly tripled between 2023 and this year. Stocks remain far above 2023 levels.

Thai business lobby warns of $24bn tariff loss

Thailand faces a loss of up to $24 billion if US President Donald Trump imposes 36% tariffs on the country, the head of the Federation of Thai Industries told Nikkei this week 

At 4% of Thailand’s GDP, a loss of that scale threatens to derail Thai economic growth entirely. Thailand has not recorded economic growth above 3% since before the pandemic, according to the World Bank, even as its neighbors in Southeast Asia have turned their economies into export-led growth engines.

Thailand’s Joint Standing Committee of Commerce, Industry and Banking, a group representing many of the country’s businesses, now predicts the economy will grow between 2% and 2.2%, down from a previous forecast that projected up to 2.9% growth, Reuters reports. Growth could ebb further if Thailand’s neighbors negotiate more favorable deals with Trump, a member of the group said. 

Former Bangladesh PM returns to country in push for elections

Former Bangladeshi Prime Minister Khaleda Zia arrived in Dhaka on Tuesday after four months in the UK receiving medical treatment. Her arrival in the country adds pressure on Muhammad Yunus’ interim government to hold elections, Al Jazeera reports.

The 78-year-old Zia served as prime minister for 10 consecutive years, most recently in 2006. Under her successor Sheikh Hasina, Zia was sentenced to five years in prison on charges widely viewed as politically motivated. Bangladesh’s Supreme Court overturned the charges in January.

Middle East

Oman’s SWF extends reach with joint ventures

Oman’s sovereign wealth fund, the Oman Investment Authority (OIA), this week announced a preliminary agreement with Algeria on a $300 million joint investment fund, Reuters reports. The fund will focus on foreign direct investment into Algeria’s mining, food security and pharmaceutical industries.

The two countries’ national oil companies also agreed to work together on oil exploration and drilling in Algeria.

As well as growing its investments across the region, Oman is emerging as a diplomatic powerhouse. This week, it mediated indirect talks between the US and Yemen’s Houthis, that resulted in an agreement to cease the US bombing campaign in exchange for an end to attacks on US shipping through the Red Sea. The Sultanate is also again hosting the US and Iran for a fourth round of talks this weekend after initial reports that talks had hit a wall, Reuters reports.

Saudi Arabia’s IPO market shrugs off US tariff slump

Amidst the uncertainty stemming from the US tariff policy that has cooled dealmaking, Saudi Arabian manufacturer United Carton Industries drew more than $20 billion in orders for its IPO this week, Bloomberg reports. Saudi Arabia hosted 12 of the region’s 14 IPOs in the first quarter of this year, raising more than $2.4 billion, a 106% year on year increase.

• Trump to visit Saudi Arabia with US business leaders (Bloomberg)

• Saudi Arabia pushes OPEC to grow output more rapidly (Reuters) 

Riyadh-based hospital and clinic operator Specialized Medical Company is also expected to sell a 30% stake in an IPO this weekend. With this momentum, Saudi Arabia is expected to host 46 IPOs this year, according to a local investment bank cited by Zawya. The bank said there is “huge pent-up demand” from investors for non-oil companies in the country.

Europe

Far-right in pole position for Romanian election runoff

Nationalist candidate George Simion won 41% of the vote in the first round of Romania’s presidential election this week—nearly double that of centrist rival Nicușor Dan, Radio Free Europe reports. Simion, a 38-year-old populist, enters the May 18 runoff as the clear favorite, polling at 55% among decided voters.

Financial markets reacted sharply. The leu fell past the symbolic five-per-euro threshold for the first time, and JPMorgan warned the central bank’s managed float regime is under pressure from hedging and speculative positions.

The vote follows a controversial annulment of Romania’s previous election over alleged Russian interference. Simion, who is banned from Ukraine and Moldova, has vowed to halt military aid to Kyiv and pledged a leadership role for disqualified pro-Russia candidate Călin Georgescu, even as he insists Romania will remain in the EU and NATO.

Slovakia and Hungary fight back as EU moves to fully sever Russian gas links

Slovakia and Hungary have strongly rejected the EU’s plan to eliminate all Russian energy imports by 2027, Offshore Technology reports. Slovak Prime Minister Robert Fico called  it “economic suicide” and Hungary pledged to “challenge this decision” at every turn. Under EU rules, the measure needs only a qualified majority, meaning the dissenters lack a veto despite their close ties with Moscow and exposure to price shocks.

The EU’s proposal would ban all spot market gas contracts by year-end and terminate all long-term deals by 2027, while requiring companies to disclose details of existing Russian contracts, the FT reports. 

Despite a reduction in Europe’s dependence on Russian energy—the country now supplies only 19% of Europe’s gas, down from 45% in 2022—Slovakia and Hungary remain heavily reliant on Russian pipeline infrastructure.

Stubborn inflation raises risks of policy reversal in Turkey

Turkish finance minister Mehmet Simsek faces mounting pressure as inflation remains at almost 40% after nearly two years in office, according to economic consultancy Emerging Market Watch. The pressure comes despite the central bank’s hiking rates to 46% and burning through an estimated $57 billion in foreign reserves in six weeks following Istanbul mayor Ekrem Imamoglu’s detention. 

Simsek’s economic program has failed to deliver the results he promised. Real wages are falling, protests are spreading, and now even pro-government business leaders are breaking ranks.

Skepticism is growing about the government’s chances of hitting its 2025 inflation target of 17.5%. Political insiders warn that President Recep Tayyip Erdoğan could blame Simsek for the pain and revert to his long-held belief that high interest rates drive inflation, raising the prospect of a full policy U-turn.

Latin America

Colombia signs on to Chinese economic trade partnership 

Colombia plans to join China’s Belt and Road Initiative (BRI), President Gustavo Petro announced ahead of a visit to Beijing next week, France24 reports. The move signals a deepening economic relationship with China, which already ranks as Colombia’s fourth-largest export destination, primarily for oil, coal and minerals.

The announcement comes amid rising tensions with the US and has sparked concern among Colombian business leaders, who question the timing and strategic alignment given the ongoing trade war.

While China’s role in Colombia’s trade mix is growing, critics warn that closer alignment with Beijing could complicate Bogotá’s longstanding partnership with the US, particularly in security and foreign policy.

Paraguay defends ‘overoptimistic’ GDP forecast

Paraguay’s central bank this week raised its 2025 GDP growth forecast to 4% from 3.8%, defying more cautious projections by international institutions, Mercopress reports. Bank president Carlos Carvallo defended the projection, citing stronger-than-expected indicators and arguing that Paraguay’s fiscal discipline would cushion any fallout from global trade disruptions.

Private sector economists aren’t as optimistic. In the same BCP survey, they forecast lower growth and inflation of 4.0%, above both the central bank’s estimate and its 3.5% target. The divergence highlights growing doubts about the sustainability of Paraguay’s recovery, especially as agricultural production remains vulnerable to drought and external volatility.

Global Macro

Rockefeller funds EM coal plant closures as public money steps back

The Rockefeller Foundation is launching an initiative to support the closure of 60 coal-fired power plants across developing countries by 2030, Oilprice.com reports. The plan aims to marshal $110 billion in combined public and private investment that could prevent 9,900 early deaths annually while creating 29,000 permanent jobs, the foundation said.

The announcement comes as global coal consumption hits record highs, despite effortts in the US and Europe to cut dependence on fossil fuels. Major Asian economies including China and India are expanding coal-fired generation to meet surging electricity demand. 

The Rockefeller Foundation hopes its initiative will not only catalyze more investment into the clean energy transition, but also galvanize other philanthropic organizations to “take risks where others cannot and catalyze momentum needed.” 

What We’re Reading

Nigeria plans to sell $186 million in green bonds by year’s end (Bloomberg) 

Nigeria approves $652 million China Exim Bank road finance package (Reuters)

Ghana’s inflation rate falls to eight-month low (Bloomberg)

Côte d’Ivoire raises projected cashew output as threatened tariffs hit exports (Reuters)

Guinea to revoke Emirates Global Aluminium’s mining license (Reuters)

Ruto pivots to scrapping tax breaks in bid to balance Kenya’s books (Bloomberg) 

Morocco launches derivatives trading (Bloomberg)

Telecom giant Airtel Africa reaches agreement with Musk’s Starlink internet (Semafor) 

US plans to slash $555 million in funding for AfDB (Semafor) 

China pours money into Bangladeshi health care as ties warm (Nikkei)

Sri Lanka wins $1bn from World Bank (World Bank)

Vietnam and Kazakhstan’s national airlines launch joint carrier (Aviation Week)

Philippines intercepts Chinese research ship in EEZ (Newsweek) 

Vietnam sets two records in Q1: imports from China, exports to US (Reuters)

Indonesian company becomes first to launch locally produced EVs (Nikkei)

Cash-strapped Maldives to build $9bn blockchain hub (FT)

Struggle intensifies in Lebanon over IMF-sponsored bank reforms (FT)

Saudi companies seek new revenue streams and brace for slowdown (FT)

Israel to expand trade with the Gulf (Bloomberg)

Cash outflows show vulnerability of Serbia’s reliance on FDI (BalkanInsight)

Ukraine parliament approves US minerals deal (Politico)

China ‘seeking $900mn in Argentine crops’ as it skirts US tariffs (Buenos Aires Times)

Argentine market is ‘ripe for IPOs’ (Latin Finance)

TotalEnergies seeks permit for $16b green hydrogen project in Chile (Hart Energy)

Trade war hits emerging market growth, but weaker dollar eases some risks (Fitch Ratings)

EM veteran Mark Mobius says his fund holds 95% in cash on trade war risks (Bloomberg)

Opinion: Global volatility is a reason to lean into emerging markets (FT)

We are committed to providing FMN readers with a free weekly digest of politically unbiased, succinct and clear news and information from frontier and small emerging markets.

Please consider becoming a paid supporter to help cover some of our costs and support our continued development of sharp markets-focused coverage and new informational products. Paid subscribers will also gain exclusive access to our quarterly EM/FM report that aggregates EM insights from 25 major banks, international institutions and consultancies.