Top geopolitical trends and risks 2025

January 2025 TFG & Pangea-Risk Monthly Briefing

This research and analysis is provided by PANGEA-RISK and distributed in partnership with Trade Finance Global.

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Five big trends in Global South country risk in the coming year

The shift in the US towards protectionism is a harbinger of an uncertain and increasingly fragmented year, amongst Western economic powers. In this context, Gulf states will increasingly grasp power and influence amongst the Global South. The Gulf Cooperation Council (GCC) countries have already invested over $110 billion in the region. The United Arab Emirates has been particularly active, committing $110 billion to projects between 2019 and 2023, including $72 billion in renewable energy, as companies like DP World expand their logistics and port operations.

Regarding American protectionism, a critical moment will be the expiry of the African Growth and Opportunity Act (AGOA), a preferential trading program designed to expand African countries’ duty-free market access and boost US-African trade. If the US Congress decides not to renew the AGOA, the trade competitiveness of African exports may be damaged.

This has been growing increasingly visible in the currency arena. China and other nations are actively promoting de-dollarisation, challenging US economic dominance through local currency trade and alternative payment systems like the Cross-Border Interbank Payments System in place of SWIFT.

Economic opportunities in the Global South are tempered by significant challenges, including persistently high youth unemployment, elevated food prices, and the disproportionate impact of climate change. These factors could potentially trigger political instability, resource nationalism, and increased interference from global powers seeking economic and military influence.

In terms of investment in Africa, Saudi Arabia has been active in mining and agribusiness, Qatar in aviation, and Türkiye in aviation, ports, construction, and defence. Hopes for peace and normalisation in the Middle East are tentative, but more promising than ever. Regional actors have been leveraging the power vacuum left in Iran and Syria to secure strategic gains, for instance, by disrupting Hezbollah’s supply chains.

Seeking alternative global trade routes amidst political risk

As instability persists in Gaza, so too will Houthi attacks on Red Sea shipping; and since maritime disruptions

benefit the overland Silk Route, it is unlikely that China will contribute to preventing these attacks to further their Belt and Road Initiative (BRI). The India-Middle East-Europe Corridor is a complementary rather than competing corridor; similarly, western corridors like the European Union’s (EU) Global Gateway project will struggle to compete with the BRI’s more than $1 trillion.

Rising inflation worldwide has been caused by supply chain disruption, climate change, tariffs, and sanctions. The persistently high cost of living has been exacerbated by stubbornly high rates of youth unemployment, a common feature of fast-urbanising emerging markets. In this context, global food prices were hit hard, remaining almost 30% higher in 2024 compared with pre-pandemic levels. Multilateral organisations attempt to combat food insecurity, but the problem is exacerbated by infectious diseases that arise in conflict areas.?

In 2025, key elections in Egypt, Iraq, Tanzania, Malawi, and Ivory Coast will be critically influenced by these key socioeconomic grievances. Countries with weak institutions like Niger, Togo, and Gabon face potential military interventions or election disruptions, continuing a pattern of political instability observed since 2019. The electoral landscape will be further complicated by a resurgence of resource nationalism, with governments in the Sahel and Senegal arbitrarily challenging international investment contracts, imposing unexpected taxation, and potentially expropriating state assets.?

The situation differs sector-by-sector too. The critical mineral industry is exposed not just to extreme climate and maritime disruption, but also geopolitical drivers. Coups in Niger and Gabon in 2023 showed the vulnerability of supply chains for critical resources like uranium and manganese.

Finally, vulnerable regions are dramatically destabilised by rising temperatures, erratic rainfall, and desertification fuelling food insecurity, mass displacement, and resource-driven conflicts across the Sahel, Levant, South Asia, and Central and southern Africa. Militant groups are exploiting these environmental vulnerabilities by controlling water sources and recruiting from marginalised communities, thereby undermining government authority.?

The central Sahel countries—Burkina Faso, Mali, and Niger—are particularly affected, allocating substantial resources to military campaigns while experiencing unprecedented violence and climate-induced displacement. The number of internally displaced persons has surged substantially over the past decade, with this trend expected to accelerate as environmental conditions deteriorate.?

Going forward, the need for ‘grey swan’ assessments to mitigate country risk are necessary: that is, by reasonably assessing improbable but predictable, high-impact scenarios. A ‘grey swan’ in 2024 was the sudden fall of the Syrian regime, and 2025 could see a seriously weakened Iranian military-clerical order or on the flip side, a stable unified government in Libya.?

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