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Welcome to the latest edition of Frontier Markets News. As always, I would love to hear from you at dan@frontiermarkets.co with news ideas, feedback and anything else you find interesting.  

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By Noah Berman, Nojan Rostami, Mariel Ferragamo and Jake Keen. Executive editor: Dan Keeler

Africa

Private equity pulls back from African infrastructure

Private investment in African infrastructure projects decreased from $2.3 billionin 2023 to $1.4 billion in 2024, according to a new report from the Global Private Capital Association. Infrastructure remains the primary focus for investors, GPCA says, accounting for 42% of private capital deployed on the continent since 2023, but the value of investments is dwarfed by the estimated $100 billion annual financing need for projects including digital connectivity and power.  

Private Capital Investment in Africa Infrastructure, 2017-2024. Source: GPMA

Renewable energy is a key target for private investment into Africa, and historically provided reliable returns: the GPCA report projects an estimated 15-21% return rate on utility-scale wind, solar, and storage and transmission projects.

• UK seeks leading role in African sustainable energy projects (Semafor)  

The report also finds that blended finance models—combining funding from multiple sources—will be “critical within the new geopolitical landscape” in which powers such as the US, China and others are competing increasingly ferociously for access to critical minerals.

China enhances Tanzania-Zambia railway commitment

China’s Civil Engineering Construction Corp (CCECC) this week pledged more than $1.4 billion to modernize the TAZARA railway line that connects Tanzania and Zambia, CNBC reports. The commitment builds on a deal signed late last year to revive the 50-year-old railway, and of the latest sum pledged, $1 billion will go toward the railway tracks and the remainder toward new rolling stock.

The railway is a crucial route for copper exports from Central Africa. The 30-year concession project details are still being negotiated, but will include three years of construction and 27 years of operations, TAZARA Authority’s CEO said. 

China is pouring $1.4 billion into the Tanzania-Zambia railway. Photo via Business Insider

The TAZARA revival agreement last year came as the US was confirming its commitment to support a rival transport link, the so-called Lobito Corridor, which links mining areas in Democratic Republic of Congo and Zambia to Angola’scoast. The fate of US support for Lobito, originally pledged by the Biden administration, remains unclear as the Trump administration has not yet publicly stated its plans for the project. 

Fighting in Ethiopia raises fear of renewed war

Ethiopia’s Prime Minister Abiy Ahmed said this week his government has no intention of starting a war with Eritrea over access to the coast, the BBC reports. Abiy’s assertion followed accusations that Eritrea had been involved in heightening tensions in northern Ethiopia where a faction of the Tigray People’s Liberation Front (TPLF) has seized parts of Tigray. 

The news raised concerns that long-simmering tensions between landlocked Ethiopia and Eritrea could boil over. Ethiopia, the continent’s fifth biggest economy, sees port access as an “existential issue” and currently pays Djiboutiaround $1.6 billion a year for access to its port. Abiy said any issues over port access should be resolved through diplomacy.

Asia

Vietnam bails out bank at center of country’s largest ever financial fraud

Vietnam is planning to rescue the bank at the center of the country’s biggest financial fraud. The $26 billion bailout for Saigon Joint Stock Commercial Bank (SCB) amounts to 5% of the country’s economic output Reuters reports.

SCB is due to repay Vietnam’s central bank within 15 years under the proposed plan. The country’s central bank is poised to lend more than $25 billion during the first year of restructuring, according to Reuters.

A branch of SCB in Hanoi. Photo: Francesco Guarascio/Reuters

The bailout for the beleaguered bank comes as Vietnam faces uncertainty over its trade relationship with the US. The country is expecting to face tariffsimposed by Donald Trump, who has promised to target the countries that have large trade surpluses with the US, Bloomberg reports.

Indonesia halts trading on largest exchange after benchmark index falls 7%

Trading was halted on Indonesia’s primary exchange on Tuesday after its benchmark index fell by more than 7%.

The stock selloff was prompted by the resignation of the country’s financial minister, which exacerbated concerns over the country’s financial stability, Nikkei reports. Investors are also worried that ratings agencies such as Moody’s could downgrade Indonesia’s credit, the Jakarta Globe reports.

Indonesia’s stock exchange. Photo: Defrizal Mohammad

Indonesia is facing market headwinds, too. Several European countries have taken aim at the country’s palm oil exports over sustainability concerns, and on Tuesday Indonesia raised export duties on palm oil to finance an increase in its use as biodiesel fuel, Reuters reports.

Cambodia’s China funded-port expansion set to go live in April

A China-funded expansion to the Ream Naval Base in Cambodia will open next month, AP reports.

A Japanese naval ship will be the first to call at the expanded port, which is set to open April 2nd. However, the US has long been concerned the naval base could be used to help China extend its maritime power across the region. Chinese warships docked at the port last year.

Cambodian naval boats at the Ream Naval Base in 2019. Photo: Heng Sinith/AP

The port opening comes amid a tightening of relations between the Southeast Asian nation and Beijing. Bilateral trade between the two countries reached some $4.5 billion last year, a 15% increase from the year prior, China Briefing reports. China continues to invest heavily in Cambodia, too, including contributing $1.75 billion to build a canal between the capital, Phnom Penh, and the coast on the Gulf of Thailand.

Middle East

Saudi sovereign wealth fund plans to widen cash-raising effort

Saudi Arabia’s sovereign wealth fund The Public Investment Fund is planning to tap a broader array of debt instruments to support Riyadh’s economic diversification agenda, Bloomberg reports. The PIF is planning on tapping US investors for the first time, and is weighing issuing euro-denominated bonds on the EU market as well.

As Riyadh’s budget deficit is growing faster than projected, entities like the PIF can apparently no longer rely on bottomless support from the government. The PIF has $925 billion in assets under management, most of them directly allocated by the government, and is looking to secure long-term financing to limit its reliance on disbursements from the public sector. 

Saudi Arabia has been one of the top emerging-market debt issuers over the past two years, as ambitious Vision 2030 plans have proven more expensiveand difficult to operationalize than expected. Riyadh is also selling down its US treasury holdings, which saw a 7.7% month-on-month decline in January as the kingdom rebalances its financial position to raise cash and adjust risk.

Iran claims 3.7% GDP growth over last nine months of 2024

Iran’s economy appears to be weathering a storm of sanctions and regional upheaval, growing by 3.7% between March and December of last year, according to central bank statistics. The bank said 2.9% of that growth came from non-oil sectors despite the country’s having suffered a record slide in the value of its currency, double-digit inflation, and an energy crisis causing rolling blackouts.

• US sanctions refineries in China buying Iranian oil (Reuters)

In his annual Nowruz (Persian New Year) address, Iran’s supreme leader Ayatollah Khamenei declared this year the year of “investments for production”emphasizing economic resilience, and President Masoud Pezeshkian pledged to deliver on his election platform of economic reform, Iranian state media reports. Both statements come in light of recent US moves to restore the maximum pressure sanctions regime on Iran, and a letter from President Donald Trump with a reported two-month deadline on reaching a nuclear deal.

Europe

Arrest of Istanbul mayor shakes investor confidence in Turkey

Investor confidence in one of the most promising reform stories of 2025 was shaken this week after a leading opposition candidate for Turkey’s presidency was arrested. The news that Istanbul’s mayor Ekrem İmamoğlu had been detained on charges related to terrorism and corruption prompted a sharp fall in the country’s currency and its stock market, the New York Times reports.

Imamoglu at a rally in Istanbul before local elections last year. Photo: Yasin Akgul/AFP

Analysts had voiced some concerns—flagged in our meta report last month—that potential weakening of fiscal or monetary policy discipline could trigger a devaluation of the lira, but the change in political tone has come as a surprise. Research firm Capital Economics said the move “suggests that President Erdogan may be more focused than we had thought on his own political standing, reducing our confidence in the policy shift.”

In a note, the firm said İmamoğlu’s arrest raises “big questions about the government’s ability to sustain investor confidence in its macro reform agenda” and the lira’s plunge will almost certainly push inflation higher, limiting the central bank’s scope for further monetary loosening. The central bank had cut interests rates earlier in March by 2.5 percentage points to 42.5%.

Hungary attempts to tackle inflation surge with price controls

Hungary this week introduced new price controls, capping grocers’ profit margins at 10% on 30 essential food items from mid-March to May, Reuters reports. The move, initiated by the country’s Prime Minister Viktor Orbán, is an effort to rein in inflation, which hit 5.6% in February. Food prices are up 7.1% year-on-year—well above the Eurozone’s 2.4% average.

• Hungary and Romania posted highest inflation in Europe (Romania Journal)

Hungary has endured the EU’s worst inflationary surge since Russia’s 2022 invasion of Ukraine, despite previous government measures, such as price caps on food and fuel. Economists warn that retailers will be tempted to raise prices on non-regulated products to compensate for lost revenue on the price-capped goods.

Customers at a market in Budapest, Hungary. Photo: Marton Monus/Reuters

Analysts view the move by Orbán, who has been a vocal supporter of Russia’s Vladimir Putin, as an effort to ease the cost-of-living pressures ahead of the 2026 elections. The effort comes as Hungary struggles with a cash crunch triggered by the EU’s withholding funds over judicial independence concerns.

Latin America

Peru declares state of emergency amid violent crimewave

Peru’s government declared a state of emergency and deployed troops on the streets of the capital Lima early this week following weeks of escalating violence, Al Jazeera reports. The move, which was prompted by the death of a popular musician, gives police and the military sweeping powers to detain people with minimal cause.

Protesters in Lima demanding the government provide security against the rising violence. Photo: Guadalupe Pardo/AP

The government has blamed the surge in violence on criminal groups—which often target businesses, including transport companies—even as authorities have claimed success in arresting criminal gang members. On Friday, the country’s Congress voted to fire interior minister Juan José Santiváñez arguing he failed to adequately handle rising violent crime

Peru’s government, led by President Dina Boluarte, prompted alarm last week after it pushed through a controversial law giving it greater oversight of non-profits working in the country. According to The Guardian, the government has increasingly rolled back civil and human rights and attacked press freedom.

What We’re Reading

DRC offers Trump mining opportunity in exchange for help to defeat M23 (WSJ)

Rwanda severs diplomatic ties with former colonial ruler, Belgium (NYT)

Niger expels three Chinese oil executives over salary disparities between expats and locals (Reuters). 

Pakistan-Afghanistan trade resumes after border crossing reopens (Reuters)

Kazakhstan ousts energy minister amid OPEC+ dispute (Reuters)

Malaysia state funds commit $27bn to domestic startups (Nikkei)

Indonesia approves controversial law expanding role of military in government (CNN)

Bahrain projected to hit 2.8% GDP growth in 2025 (Zawya)

Latvia limits crossings at Russia and Belarus borders (Barron’s)

Serbia denies sonic attack on protestors (NBC)

Colombia government chaos deepens as finance minister quits (FT)

Guyana leader rules out talks with Venezuela over disputed border region (Barron’s)

Cuba reconnects electrical grid, restoring power to much of Havana (Reuters)

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