🌍 Frontier Markets News, May 31st 2025
A weekly review of key news from global growth markets
Africa
AfDB’s new leader hopes to diversify funding sources
The African Development Bank (AfDB) this week announced its new leader will be Mauritania’s former finance minister Sidi Ould Tah, Reuters reports. Tah will take the helm at a point of unprecedented turmoil with the global economy roiled by tariffs, volatility in the price of major commodities, and a pullback by Western nations from funding the development bank.
Tah, who recently stepped down as president of the Arab Bank for Economic Development in Africa, says he will use his connections to the oil-rich Middle Eastern countries to broaden the bank’s funding sources, as well as help the AfDB tap into Africa’s $2 trillion in pension funds as its development needs grow.
- 21 African economies 'expected to grow more than 5%' this year (Africanews)
The president-elect will also likely focus more heavily on collaboration with the private sector and potentially bring on other funding countries such as China and Japan, experts told Bloomberg. Tah will take office for a five-year term starting in September.
Nigeria reflects on two years of economic reform under Tinubu
Nigeria’s President Bola Tinubu marked his second anniversary in office this week with a speech that touted his economic progress, declaring that his sweeping reforms have been working, the BBC reports. Tinubu instituted several key changes in the continent’s most populous country, including removing a costly fuel subsidy on his first day in office in 2023, cutting electricity subsidies and instigating two currency devaluations.
Tinubu’s moves prompted mass protests over the impact on Nigerians’ cost of living, but the inflation rate has since slowed, and the protests have cooled; last month annual inflation rate was 24%, a full 10% lower than last year at this time.
The economy is also growing. The World Bank predicts that GDP will grow by 4% this year, faster than the 3% rate when Tinubu came to power. His government has also reduced the fiscal deficit by 2%, while revenues rose from 7% of GDP in 2023 to 12% in 2024—pointing to “impressive strides to restore macroeconomic stability,” the bank said.
DRC says it will seal US minerals deal in June
Officials from the Democratic Republic of Congo said this week that they aim to clinch a mineral extraction deal within a month with the US, the FT reports. Washington will host representatives from Kinshasa next week to further the discussion.
The DRC-proposed deal would give US companies access to critical minerals such as lithium, cobalt and coltan in return for investment in infrastructure and mines. The US is also supporting DRC in its effort to end a longstanding conflict in the country’s east with Rwanda-backed rebel groups.
Both the US and DRC hope to see more American involvement in the minerals sector to reduce China’s dominance in DRC’s critical minerals. A peace deal would also pave a path for more cooperation between DRC and its neighbors—even Rwanda—in the export and processing of the metals.
Asia
Protests grow in Bangladesh over perceived attack on public sector
Bangladeshi public-sector workers this week took to the streets in protest against a move by interim leader Mohammed Yunus’ administration to make it easier to fire government workers, Reuters reports.
Yunus’ government issued the ordinance on Sunday, sparking three days of protests, which included teachers and tax collectors. Late last week Yunus threatened to resign if he didn’t get the support he needed to enact his ambitious reform agenda, the NY Times reports.
Initially viewed as something of a savior for returning from exile to lead Bangladesh after the ouster last summer of former prime minister Sheikh Hasina, Yunus has lost some support amid continually delayed elections. He recently suggested polls, initially promised or later this year, could be deleted until June 2026.
Pakistan makes bitcoin a priority
Pakistan announced this week it would create a “strategic” bitcoin reserve, Dawn reports. Speaking at a cryptocurrency conference in Las Vegas, Bilal Bin Saqib, CEO of the newly created Pakistan Crypto Council,said the move would help his country become a “forward-looking hub of digital innovation.”
Saqib also revealed that Pakistan would allocate 2,000 megawatts of electricity—enough to power up to 2 million homes—specifically for bitcoin mining and AI data centers.
The moves come as Pakistan increases its push to attract investment from the US, and as US President Donald Trump embraces AI and crypto. Saqib’s comments landed near the president’s ears: Trump’s sons Eric and Donald Jr. were at the Las Vegas conference where Saqib announced the reserve, as was US Vice President JD Vance.
Subsidy cut threatens investments in Vietnam’s renewables
The promoters of dozens of wind and solar projects in Vietnam say they are at risk of default if the country’s government eliminates a subsidy for renewable energy, Nikkei reports.
Vietnam previously promised to buy renewable energy for up to 20% more than market prices, but Hanoi is now considering scrapping that agreement, citing a paperwork issue.
Any cut would add to the turmoil facing Vietnam’s renewables sector since the US withdrew in March from a $20 billion deal to aid the country’s green transition. The US withdrawal could adversely affect some $3 billion in loans for Vietnam and Indonesia’s so-called Just Energy Transition Partnership, which also includes backing from the EU, Japan and other nations. However, some experts suggest the departure of the US could actually make the deals more efficient by eliminating the country’s vested interest in gas exports.
Middle East
Oman looks to expand trade infrastructure
Oman this week signed a deal with the UAE’s DP World to develop a special economic zone as part of a push to grow its trade infrastructure, Zawya reports. The first phase of the project, which will connect the neighbors’ major sea and land ports, will focus on non-oil related export capacity.
Oman and other Gulf nations are keen to capitalize on US disruptions to global trade by enhancing their ability to support a wide range of supply chains, including manufacturing and technology.
- Oman awards $600mn contracts for tourism projects (AGBI)
- Oman’s Q1 revenue down as oil income drops (Reuters)
Oman is also growing its oil and gas export capacity, which is the primary source of the foreign exchange earnings used to drive public investment in its economic diversification plans. This week Muscat moved forward on the bidding process for expansion of its Qalhat LNG facility, which is to grow its export capacity by adding 3.8 million tonnes per annum of new production to the current 10.4 million.
Iraqi PM includes Iran-friendly group in new coalition
Potential contenders for Iraq’s parliamentary elections in November became clearer this week, as Prime Minister al Sudani formalized his new electoral alliance, the National reports. The new Reconstruction and Development Coalition, a group of Shia parties affiliated with the incumbent Coordination Framework, which holds 138 of 329 seats in parliament, includes the leader of the Popular Mobilization Forces—part of Iran’s so-called Axis of Resistance—which the US has threatened with sanctions.
Sunni parties have yet to form a coherent coalition, and the leading Taqqadum party announced this week that it would not join any electoral alliances. Led by former parliament speaker Mohammed al-Halbousi, Taqqadum won the second largest number of seats in the last election, but has since been losing support to smaller, more locally-focused spinoff parties.
It is not yet clear if Kurdish political parties, strengthened and legitimized by successful regional elections in October 2024, will run as a unified bloc. But with the Sunni vote increasingly fragmented, Kurdish unity could be the deciding factor in forming a new government, which al Sudani has indicated he is interested in leading for a second term.
Europe
Romanian markets celebrate election result
Investor optimism prompted by the May 18 election of reformist Nicușor Dan as President of Romania pushed the Bucharest Stock Exchange BET index up by over 4% this week to a nine-month high, Romania Insider reports. Romania’s currency, the leu, gained 1.4% and bond yields fell 60 basis points.
However, analysts question whether the euphoria can persist given Romania’s underlying fiscal crisis and the challenging road ahead for meaningful reform. The durability of the market gains depends on Dan’s ability to form a stable government and deliver credible fiscal consolidation from a 9.3% budget deficit.
While political uncertainty has lifted, Romania still faces a European Commission assessment in June and potential rating downgrades if deficit reduction stalls. Although the BET index has gained more than 11% in the past two weeks, it remains flat for the past year, and trails the S&P 500’s 11% rise and the German DAX’s 29% year-on-year rise.
Bulgaria puts Eurozone accession back on the table
Bulgaria has announced that it will rejoin the path to Eurozone membership in 2026 after inflation fell to 3.5% in April, meeting convergence criteria that previously derailed accession plans, the FT reports.
Prime Minister Rosen Zhelyazkov anticipates a positive European Commission assessment next week, following years of delays from political instability and inflation spikes caused by Russia’s cutting off of gas supplies and its invasion of Ukraine.
Despite domestic opposition—and President Rumen Radev warning that the country is unprepared to adopt the single currency—Bulgaria would become the Eurozone’s 21st member and only the second new entrant this decade.
Latin America
Argentina sells $1bn peso bond
Argentina raised $1 billion from international investors through its first peso-denominated bond sale in seven years, the Buenos Aires Herald reports. The sale attracted $1.7 billion in bids for the five-year bond, which offered a 29.5% coupon—but is denominated in Argentine pesos.
The unusual structure allows foreign investors to buy the bond with dollars while receiving peso payments, helping boost central bank reserves without violating President Javier Milei’s pledge to avoid monetary expansion that could reignite inflation.
The bond includes a two-year put option allowing early exit before 2027 elections, addressing investor concerns about policy continuity. While Argentina’s borrowing costs have plummeted since Milei’s victory—with dollar debt spreads falling from over 25 percentage points to 6.66 percentage points—the creative financing mechanism reflects ongoing challenges in rebuilding reserves to meet a $4.4 billion IMF target by June 13.
US cancels oil licenses and opposition loses out in Venezuela
The Trump administration this week terminated oil firm Chevron’s license to operate in Venezuela, ending the last major US energy presence in the country with the world’s largest proven reserves, the FT reports. The license cancellation comes as Venezuela’s President Nicolás Maduro has consolidated power following local elections this week that have been condemned internationally as fraudulent, the BBC reports.
Opposition leader María Corina Machado has lobbied for tougher sanctions on Maduro’s regime, but the incumbent president appears better positioned to weather US pressure than before, having strengthened ties with Russia and China.
Chevron, which produces over a quarter of Venezuela’s oil, will maintain facilities under limited authorization but can no longer operate commercially.
Suriname election deadlock threatens nascent oil boom
Suriname is facing political uncertainty after this week’s National Assembly election ended in deadlock with opposition party NDP winning 18 seats against the ruling VHP’s 17, Bloomberg reports. The inconclusive result triggered coalition talks that could result in the main opposition party winning control of the government, according to AP.
The virtual tie creates uncertainty in the oil sector, too, just as companies are preparing to develop offshore reserves estimated at 760 million barrels. First production is scheduled for 2028 and output is forecast to reach 200,000 barrels daily within a decade.
The stalemate reflects competing visions for the oil windfall. Incumbent President Chandrikapersad Santokhi offers investor-friendly policies and market reforms, while challenger Jennifer Geerlings-Simons is pushing for stronger social programs and local content rules. Prolonged negotiations to secure the two-thirds majority needed to elect a president risk delaying key policy decisions and shaking confidence among energy companies betting on Suriname becoming the region’s next petro-success story.
Global Macro
EM growth potential falls
Fitch Ratings has slightly lowered its five-year growth forecast for major emerging markets to 3.9% from 4.0%, with China’s structural slowdown being a key driver for the revision. The firm cut its forecast for China’s growth to 4.3% from 4.6% while also lowering projections for other markets such as Mexico, Indonesia and South Korea, citing demographic headwinds and productivity constraints across these key economies.
The lowered estimates were partially offset by upgrades for several markets, with India’s potential growth revised up to 6.4% and Brazil’s to 2%. Russia and Poland also saw upward revisions despite geopolitical challenges.
The mixed revisions underscore the diverging growth trajectories within emerging markets, with commodity exporters and reform-focused economies potentially outperforming traditional manufacturing hubs.
What We’re Reading
African currencies ‘set to weaken against dollar’ (Bloomberg)
Africa’s biggest online retailer ramping up competition with Chinese e-commerce (Semafor)
US says Moroccan proposal should be sole basis for Western Sahara talks (Reuters)
South Africa seeks US LNG trade deal (Offshore Technology)
Why big oil turned to Trump for help in Africa (WSJ)
Bangladesh government to use $12bn in Hasina cash to create sovereign wealth funds (Nikkei)
Thailand seeks to expand its share of world’s halal food market (Nikkei)
Global bond market turmoil shakes Indonesia (Nikkei)
Mongolia government faces confidence vote (Nikkei)
French president signs billions in deals in Indonesia and Vietnam (Le Monde)
ASEAN countries agree to lower intra-bloc trade barriers (Nikkei)
US says supports gas deals with Kurdistan region after Iraq lawsuit (Al Arabiya)
More private credit partnerships likely between GCC sovereigns and asset managers (Zawya)
Israel and Syria hold direct talks to curb spiraling tensions (FT)
Saudi Aramco boss plans to keep borrowing after $14 billion YTD haul (Bloomberg)
Putin’s war economy is cooling, but Russians still feel richer (FT)
‘State of emergency’ in Panama after strike leads to layoffs (France24)
Bolivia taps Chilean port to boost fuel imports (Mercopress)
Haitian government proposals dialogue with gangs to end crisis (Dominica News Online)
Peru joins railroad project to Chancay to boost Chinese trade (Mercopress)
Paraguay seeks to become regional logistics hub (Mercopress)
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