🌍 Frontier Markets News, April 12th 2025

Dear Reader,

I’m delighted to share that I will be moderating a free webinar with experts from the Milken Institute’s Africa Leaders Business Council on Tuesday April 15th focused on Africa’s evolving critical minerals landscape. 

Join us at 9am ET as we explore the role of new partnerships and innovative approaches in securing sustainable mineral supply chains, driving Africa’s economic transformation, and advancing global energy transition objectives. 

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

Africa

US-DRC mineral deal inches toward finish line

Washington is close to clinching a deal with the Democratic Republic of Congo to provide support for Kinshasa’s government in exchange for access to critical mineral assets, the FT reports. Under the agreement, the US Development Finance Corporation would underwrite investments in DRC’s major reserves of minerals, including copper, cobalt, coltan, lithium, tin and uranium—minerals that are crucial for supporting the global transition to clean energy. 

In return, Washington will provide stronger backing for DRC President Félix Tshisekedi’s embattled government, which is struggling to contain violence in the eastern region of the country involving Rwanda-backed M23 rebels. It remains unclear, however, what that support would look like for DRC.

While the DRC reportedly approached the US with the plan, it comes as the US has been also pushing for a similar minerals deal in war-torn Ukraine. The proposal would also boost US presence in a sector and region where Chinaalready has a dominant presence.

Illegal financial flows ‘cost Africa $89bn per year’ 

The Economic Community of West African States said this week that illicit financial flows cost Africa $88.6 billion annually—around 3.7% of the continent’s GDP—Premium Times reports. 

The ECOWAS commissioner for political affairs, Abdel-Fatau Musah, said corruption and fragile governance were largely to blame, saying “corruption and financial crime are among the biggest obstacles to economic and social development in West Africa.” He also said cryptocurrencies and online financial services have created new channels for illicit capital flows.

ECOWAS is calling for governments in the region to enhance their efforts to tackle corruption—and particularly to cooperate with each other to limit the flow of funds across their borders. “Tackling corruption and illicit financial flows is essential to achieving sustainable development and regional stability,” Musah said.

Africa’s carbon offsets ‘are too cheap’

As foreign companies seek to zero out their carbon balance by investing in offsets, the cost is being paid by Africa, according to Akinwumi Adesina, the head of the African Development Bank. In an interview with the FT, Adesina, who will be stepping down later this year, said African nations are significantly underpricing carbon offsets, enabling what he called a “carbon grab,” akin to land grabs in colonial times.

Countries are “losing vast areas of land” to carbon offset schemes, he said, and in many cases not seeing much benefit. One Liberian official said the country had “not seen one cent for the carbon we are absorbing.” 

Adesina also said African nations’ GDP should be recalculated, taking into account the value of their natural capital, such as forests, mineral reserves and clean energy potential. Creating a more realistic estimate of their effective GDP would enable them to borrow at more favorable rates, providing a much needed boost for their economies, he told the FT. 

Asia

Vietnam to launch trade talks with US after tariffs pause

Vietnam and the US agreed to begin trade negotiations on Thursday, one day after US President Donald Trump paused heavy tariffs that could have ground bilateral trade to a halt. At a meeting in Washington, the two sides agreed to start “formal discussions on reciprocal trade,” according to a US Treasury readout.

The Vietnamese report on the meeting offered more details, including that the two sides had agreed to “consider minimizing non-tariff barriers to each other’s goods.”

Vietnam was set to be one of the countries hit hardest by Trump’s “reciprocal” tariffs. The country has responded with a dealmaking frenzy in a bid to stave off future levies. Before shuttling down to Washington, Vietnamese Deputy Prime Minister Ho Duc Phoc presided over the signing of a $560 million deal in New York between national airline Vietnam Airlines and Citibank that observers expect will finance the purchase of Boeing planes.

Pakistan dangles critical minerals as carrot in US negotiations

Pakistan suggested the US could invest in its critical minerals in a call between the countries’ top diplomats on Monday. US Secretary of State Marco Rubio raised the prospect for critical minerals engagement, which Pakistani Foreign Minister Ishaq Dar reciprocated, according to readouts from the US Department of State and Pakistan’s foreign ministry. 

The negotiations, which took place before the US paused planned “reciprocal” tariffs on Pakistan, showed how the South Asian country could respond if the tariffs return in 90 days. Securing access to critical minerals has been a priority for the Trump administration, including in negotiations over Ukraine and in comments about Greenland.

• Sri Lanka wins commitment from India and UAE to build energy hub (Reuters)

Rubio also suggested expanding opportunities for US businesses in Pakistan and said that trade and economic cooperation would underpin the relationship between the two countries.

Middle East 

Iran agrees to nuclear negotiation with US 

Iran and the US are expected to hold direct nuclear talks hosted by Oman this weekend, led by US Special Envoy for the Middle East Steve Witkoff and Iran’s foreign minister Abbas Araghchi, the BBC reports. The discussions will be mediated by Oman’s foreign minister Badr Al Busaidi. 

Negotiations over direct talks had been held up by public opposition from Ayatollah Ali Khamenei, but a coordinated effort by senior Iranian officials worried that the US and Israel might launch a joint attack on Iran’s nuclear program reportedly swayed the Ayatollah. 

• Iran-backed militias in Iraq ready to disarm to avert US military action (Reuters) 

The US has shown no sign of relenting on its so-called maximum pressure strategy against Iran, in recent weeks moving to tighten sanctions, and bolstering its military presence in the region by deploying stealth bombers and increasing its naval presence. Iran has signaled willingness to negotiate with “earnest and with candid vigilance…giving diplomacy a genuine chance” if the US accepts that “there can be no military option” on the table.

World Bank approves $1.1bn in funding boost for Jordan

Jordan and the World Bank have reached an agreement on an additional $1.1 billion in financing to support fiscal sustainability, fund private sector-led investment and expand social protection, the multilateral lender said this week. Key targets for the new funding are boosting renewable energy development, facilitating cash transfers to 150,000 people, providing investment for local startups, and enhancing customs procedures.

The World Bank funding will complement $1.2 billion in monetary support secured from the IMF in early 2024, some $453 million of which has been deployed so far. The IMF late last year praised Jordan’s “resilience and maintain macro-economic stability, despite the headwinds caused by the regional conflict and the heightened uncertainty.”

That optimistic outlook, however, is increasingly fragile, as Jordan is uniquely dependent on US economic aid and security assistance—both of which are in question as the Trump administration slashes spending and looks to reduce its role in the Middle East. Jordan was also one of the hardest hit in the region by Trump’s “reciprocal tariffs”. 

Europe

Russia accelerates asset seizures as growth slows

Russian officials have intensified domestic asset seizures, with prosecutors targeting over 85 Russian businesses worth approximately $27.9 billion since the Ukraine war began, the FT reports. Allies of President Vladimir Putin have emerged as primary beneficiaries of "soft nationalizations," where the state presses private companies to offer shares in their enterprises as “gifts” to the state.

The trend is unfolding just as US-Russia relations are showing signs of thawing, with American business delegations meeting Russian officials in Moscow and US President Donald Trump talking up the prospect of renewed energy sector collaboration.

This diplomatic outreach comes as Russia's economy falters. February GDP growth plunged to 0.8% year-over-year—down from 3% in January—and oil prices fell below $60 per barrel, well under the $70 benchmark used for the state's 2025 budget projections.

North Macedonia fires starting gun on Trump trade dealing

Amid reports that over 70 countries have reached out to the Trump administration to start trade negotiations, North Macedonia responded to a 33% tariff on its exports with plans to slash customs duties on American imports to zero, Balkan Insight reports.

While trade with the US represents less than 1% of the Balkan nation’s foreign commerce, with exports to America totaling just over €100 million last year, Skopje has set its sights on securing a comprehensive free-trade agreement, according to the country’s finance minister Gordana Dimitrievska-Kochoska.

In the short term, the indirect impact on North Macedonia’s exports caused by US tariffs on the EU could be more significant. The EU accounts for nearly 70% of North Macedonia's exports, with Germany serving as its principal trading partner.

Latin America

China looks to turn tariff disruption into trade deals

China is leveraging confusion and uncertainty generated by the Trump administration’s trade policies to deepen its relationships in Latin America, BNE Intellinews reports. As Latin American leaders gathered for a Community of Latin American and Caribbean States (CELAC) summit in Honduras’ capital Tegucigalpa this week, a high-level Chinese delegation conducted bilateral meetings with delegates on the sidelines.

In May, China’s President Xi Jinping is expected to attend a China-CELAC ministerial conference aimed at further strengthening ties with Latin American leaders. 

• Chin’s Xi Jinping to tour Vietnam, Malaysia and Cambodia amid trade war (Nikkei)

China's intensified diplomacy came as 30 of 33 CELAC member states explicitly rejected "unilateral coercive measures contrary to international law" in a declaration agreed at the summit. Beijing's foreign ministry has seized the opportunity, with spokesman Lin Jian urging the Trump administration to take "concrete actions" to support Latin American countries while dismissing UScriticisms of China's economic engagement in the region. 

Two-thirds of Latin American countries have already joined China's Belt and Road Initiative and Beijing has surpassed the US as the leading trading partner for Brazil, Peru and Chile. 

Argentina reaches $20 billion IMF deal

Argentina has secured a preliminary $20 billion agreement with the IMF that would help it shore up its dwindling foreign currency reserves, providing crucial support to President Javier Milei's economic reform agenda, the Buenos Aires Herald reports. Economy minister Luis Caputo has asked the multilateral lender to pay more than 40% of the loan in the initial disbursement to help top up its reserves.

IMF officials praised Argentina's "impressive early progress in stabilizing the economy," noting that Milei's fiscal restraint has already delivered "rapid disinflation and a recovery in activity and social indicators." Annual inflation has dropped significantly from 211% to 118% during Milei's first year in office, while budget deficits have been converted to surpluses, boosting investor confidence.

• Milei plays down country’s past to lure foreign investment (Bloomberg) 

The bailout represents a critical lifeline for Argentina, which already owes the IMF more than $40 billion and has received 22 IMF loans since 1958. The fresh capital could enable Milei to ease Argentina's strict foreign exchange controls that have deterred investment for years.

Venezuela sanctions hit economy and Caribbean neighbors

The Trump administration has intensified pressure on Venezuela by revoking licenses for oil companies including Chevron, Repsol, and Eni, and imposing secondary tariffs on countries buying Venezuelan crude, OilPrice.com reports. These measures have reportedly caused an 11.5% drop in oil exports in March, prompting President Nicolás Maduro to sign an "economic emergency" decree suspending municipal taxes and mandating purchases of domestic products.

Venezuela's government has simultaneously cracked down on businesses using the black market exchange rate as the bolívar weakens. Shops face audits, fines and closures if caught using unauthorized rates, forcing many to set "intermediary" prices to survive. Analysts now project inflation will reach 189% this year, threatening Venezuela's fragile economic recovery.

The Trump administration this week also revoked licenses for BP and Shell gas projects in Venezuelan waters meant to supply Trinidad and Tobago's LNG plant—a cornerstone of the island nation's $3.6 billion export economy. Prime Minister Stuart Young confirmed the revocations and plans to appeal, as the Dragon field's estimated 4 trillion cubic feet of gas reserves were considered vital for the nation's energy security.

What We’re Reading

Zimbabwe issues dollar bonds to compensate ex-farmers for land grabs (Bloomberg)

Tanzania and DRC sign port construction deal (The Citizen)

South Africa’s tariff shock threatens fragile economic recovery (FrontierView)

Libya’s central bank devalues dinar 13% (Africanews)

African nations to hold AGOA trade talks with US this summer (Bloomberg) 

Nearly $1bn in US funding dries up for African entrepreneurs (Business Insider) 

AI threatens to shrink Africa’s labor-outsourcing market 40% (Semafor) 

Thailand arrests US professor under lese-majeste laws (Washington Post)

Cambodia’s independent media dwindles after US funding cut (NYT)

Indonesia stocks and currency continue to tumble (Nikkei)

Stock markets of Taiwan, Thailand and Vietnam deep in the red (FT)

Saudi outperforms Gulf peers in early trade as Trump pauses tariffs (Reuters)

GCC on track to see an uptick in local currency sukuk issuance (Zawya)

EU agrees to start trade talks with UAE (FT)

Iranian currency's value tumbles to new record low (Radio Free Europe)

Armenia and Iran hold joint military drills amid strains over Azerbaijan(Reuters)

Moldova's army gets a boost from EU (Radio Free Europe)

Romanian presidential hopeful faces fury after admitting role in flooding villages (Politico)

Ecuador gears up for presidential election run-off (BNE Intellinews)

Panama to file criminal complaint over canal concession (FT)

Bolivians tighten belts as new inflation reality bites (Reuters)

Estimates of Chile’s lithium reserves sharply increased (Reuters)

US appears set to cut Argentine meat imports (Mercopress)

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