The article aims to determine the role of foreign direct investment (FDI) in the economic development of African countries and to identify the conditions for increasing its contribution to the expansion of the production base, the increase in value added within the national economy, and the development of national and regional economic linkages. The study employs methods of analysis, generalization, comparison, and typologization. It is established that Africa continues to account for a limited share of global FDI flows, while capital inflows are characterized by a high degree of country concentration and dependence on a small number of large projects. It is found that the country structure of FDI in Africa is polarized and includes a limited group of countries with a diversified structure of FDI inflows, a group of countries dominated by a resource- and project-based model of FDI attraction, and a broad range of economies with limited participation in investment flows. It is shown that the most significant effect on economic development is associated with FDI directed to manufacturing, the processing of agricultural raw materials, energy, and transport and logistics infrastructure. The article demonstrates that increasing the contribution of FDI to the economic development of African countries requires an industrial policy focused on supporting domestic suppliers and developing special economic zones and industrial parks. The selection and facilitation of investment projects, taking into account their place in the value chain and their role in regional production cooperation within the African Continental Free Trade Area (AfCFTA), are also of substantial importance.

Keywords: foreign direct investment, Africa, economic development, industrial policy, special economic zones, industrial parks, industrial cooperation, global economy.

JEL Classification: F21, F63

For citation
Sakharov D.M. The Role of Foreign Direct Investment in the Economic Development of African Countries. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 6–17. https://doi.org/10.65324/wewf015

The underlying research focuses on the analysis of socio-economic challenges of African countries today. The purpose of writing this article is to outlay the essence of main barriers preventing African countries from dynamic growth. Research’s objectives include identifying strengths, weaknesses, threats and opportunities of African labor and businesses in manufacturing and services sector. To accomplish the research, big information and statistical basis was used in a form of official reports by international financial institutions, multilateral development organizations, central banks and ministries of finance of African countries. In the process of the research methods of situation analysis, historicism and international statistical comparisons were used. As a result of the conducted research it was proven that African countries lag behind other developing nations due to lack of cadre inclusion in production processes, mechanisms of new jobs creation, small size of businesses, high cost of capital, investment and foreign capital, corruption at the top, as well as deficits of using domestic opportunities of national savings. The theoretical significance of the research lies in the possibility to use basic deliverables of the article in the process of enriching knowledge about African challenges in education. The practical significance of the article is that its proposals and recommendations can be widely used in activities of companies interested in finding new markets in Africa, local regulatory and government agencies working on developing strategies to bridge economic, technological and industrial gap between African countries and the rest of the world, as well as decreasing poverty. The article concludes by saying that African countries will continue to lag behind the rest of emerging economies until they work out a mechanism of optimal and balanced approach to effective use of domestic cadre potential and capital of foreign investors of official and private origin, as well as synergies in industry by means of enlarging enterprises and making use of economies of scale.

Keywords: structural transformation, demographic challenge, food sovereignty, economic growth, human resources, infrastructure investment, climate finance, international business.

JEL Classification: F14, F63

For citation
Mikhail V. Zharikov Strategic objectives of African countries’ development. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 18–29. https://doi.org/10.65324/wewf016

Since the beginning of the 21st century, the African continent has taken a special place in the system of foreign economic priorities of the Russian Federation. This is due to a number of internal and external factors, among which the reorientation of Russia’s foreign policy towards the so-called “global South” has become particularly important. In the context of the growing confrontation with the West and the tightening of sanctions pressure, Russia has been forced to intensify cooperation with regions that are not involved in the sanctions policy. Africa is one of these regions. With their vast natural resources, labor force, and underdeveloped economies, African countries are of interest to Russia for developing trade, investment, and other relations. The growing importance of the Global South reflects a fundamental shift in the global balance of power, with Africa becoming a battleground for influence between China, India, Turkey, the Gulf countries, the United States, and the European Union. In order to strengthen its position, Russia must take into account this multipolar competition and develop its own model of partnership that differs from the Western model, based on equality and respect for sovereignty. This article aims to analyze the current state and prospects of Russia’s economic cooperation, particularly its trade relations with African countries. The focus is on justifying the need to deepen these ties, examining the existing challenges and contradictions, and identifying the strategic opportunities that Russia can exploit in the context of global geoeconomic changes.

Keywords: Africa, Russia, trade, turnover, exports, imports, world economy.

JEL Classification: F20, F63

For citation
Starodubtseva E.B. Russia’s Cooperation with African countries: challenges and prospects. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 30–38. https://doi.org/10.65324/wewf017

Micro, small and medium-sized enterprises (MSMEs) play a significant role in ensuring sustainable economic development and employment generation in developing economies. In African countries, this sector constitutes a primary source of entrepreneurial activity and household income; however, its development is significantly constrained by limited access to financial resources. In this context, microfinance becomes particularly important, as it provides small businesses with access to credit and other financial services. The aim of this study is to identify the role of microfinance in the development of the micro, small and medium-sized enterprise sector using the examples of Kenya and Nigeria. The article examines institutional mechanisms supporting small and medium-sized enterprises (SMEs), the operational characteristics of microfinance institutions, and the impact of digital financial technologies and government programmes on expanding entrepreneurs’ access to financing. Particular attention is given to analysing differences in the microfinance models of the two countries: the digital financial inclusion model of Kenya, based on the widespread use of mobile financial services and cooperative financial institutions, and the institutional model of Nigeria, in which the leading role is played by government agencies supporting entrepreneurship, SME development programmes and credit guarantee mechanisms. The results of the study demonstrate that microfinance represents an important instrument for stimulating entrepreneurial activity and enhancing financial inclusion. The effectiveness of microfinance mechanisms largely depends on the level of development of financial infrastructure, the quality of the institutional environment and government policies aimed at supporting small businesses. A comparative analysis of the experiences of Kenya and Nigeria makes it possible to identify different approaches to the development of microfinance systems and to determine promising directions for improving SME financing mechanisms in African countries.

Keywords: microfinance, small and medium enterprises, financial inclusion, entrepreneurship, Africa, African economy, Kenya, Nigeria, microfinance institutions, government support, economic development.

JEL Classification: F23, F63

For citation
Glebova A.G., Iliev M.B. Martin I.B. Microfinance as a Driver of Small and Medium-Sized Enterprise Development in African Countries: Evidence from Kenya and Nigeria. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 39–48. https://doi.org/10.65324/wewf018

The African Continental Free Trade Area (AfCFTA) is the most ambitious integration initiative in Africa’s modern economic history, connecting fifty-five economies with a combined market of over 1.56 billion people and GDP exceeding US $3.06 trillion (IMF). Beyond trade liberalization, AfCFTA is designed to promote structural transformation, industrialization, and financial cooperation. This paper examines the AfCFTA’s potential to catalyze financial and trade integration by analyzing the evolution of cross-border payment systems—particularly the Pan-African Payment and Settlement System (PAPSS)—and their implications for intra-African trade flows. Using a comparative institutional and macroeconomic approach, the study combines data from the African Development Bank (AfDB), the International Monetary Fund (IMF), the World Bank, Afreximbank, and the United Nations Economic Commission for Africa (UNECA). Results indicate that efficient and interoperable financial infrastructure could reduce transaction costs, mitigate currency fragmentation, and raise intra-African trade by 20–35% over the next two decades. The findings highlight the complementarity between trade facilitation and financial integration: liberalizing tariffs without synchronized payments reform limits welfare gains, while digitized settlement systems—such as PAPSS—amplify AfCFTA’s impact by accelerating liquidity circulation and supporting SME participation in cross-border markets. The study concludes with policy recommendations for scaling PAPSS adoption, harmonizing regulatory frameworks, piloting central bank digital currency (CBDC) corridors, and enhancing risk-sharing facilities through Afreximbank. These measures, implemented jointly, can help build a resilient and self-financing continental market aligned with Agenda 2063.

Keywords: financial integration, African trade, Africa, African economy, regional payments, digital finance, global economy, global finance.

JEL Classification: F13, F15, F36, G20, O19

For citation
Hamidou B.M., Shcherbakov G.A. The african continental free trade area as a catalyst for financial and trade integration in Africa: opportunities, challenges, and the road ahead. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 49–57. https://doi.org/10.65324/wewf019

The article analyzes the problems of interaction between African countries with both traditional Bretton Woods institutions (IMF, World Bank Group) and organizations of the so-called parallel circuit — regional institutions that duplicate the functions of classical international financial organizations. Based on an analysis of the state of the balance of payments of African countries, the conclusion is made about the region’s chronic need to cover the current account deficit, which, due to underdeveloped markets and high risks, is carried out mainly by attracting official financing from the IMF and the World Bank Group. However, the high implicit costs of such financing, including strict lending conditions and the political bias of decision-making, are pushing African countries to search for new sources of financing in the parallel circuit of international financial architecture. At the same time, most of the resources of the parallel circuit of international financial architecture remain unused by African countries due to the underdevelopment of local development institutions and regional safety nets. The niche of debt financing in the African region is being actively occupied by the PRC, but loans from the PRC pose a threat to economic sovereignty due to burdensome collateral requirements for lending. The conclusion is substantiated about the need to develop cooperation between African countries with regional institutions of the Eastern blocs — BRICS, EAEU, the Gulf Monetary Union — as well as in establishing a regional development bank based on the capital of African countries.

Keywords: Africa, external debt, balance of payments, capital flows, regional safety nets, IMF, World Bank, development banks, official development assistance, international credit.

JEL Classification: F36, F45, F63

For citation
Navoy A.V. The role of African countries in the formation of the bloc structure of the international financial architecture. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 58–66. https://doi.org/10.65324/wewf020

The article examines how digital innovations in public debt management affect the sustainability of government finances in an emerging economy, using Ghana in 2000–2024 as a case study. The topic is relevant because many African countries face growing public debt and limited fiscal space, while their governments are actively introducing digital tools. The main goal of the study is to assess to what extent the introduction of digital solutions into the debt management system (measured by the Digital Debt Management Innovation Index, DMS) helps improve debt servicing and long-term fiscal sustainability. The authors use secondary data from official statistics and international organizations. For the analysis, they apply ARDL modeling, regression analysis (OLS with stepwise variable selection), as well as tests for stationarity and multicollinearity. The results show that higher DMS values are significantly associated with better operational efficiency of debt management (lower transaction and information costs). However, digitalization does not have a direct significant effect on the debt-to-GDP ratio. The key factor behind a lower debt burden is the growth of government revenue (revenue-to-GDP ratio). The authors conclude that digital solutions are a necessary but not sufficient condition for fiscal sustainability. They mainly play a reactive role and are strengthened during periods of debt stress. To achieve sustainability, digital systems must be combined with budget revenue reforms and institutional changes. The experience of Ghana can be used as a reference point for other emerging African economies.

Keywords: digital innovations, public debt management, fiscal sustainability, emerging economy, debt burden, budget revenues.

JEL Classification: H63, E62, O33, O53

For citation
Gorbacheva T.A., Kwamibuor M.K. Digital Innovation in Public Debt Management for Fiscal Sustainability in an Emerging Economy: The Case of Ghana. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 67–80. https://doi.org/10.65324/wewf021

The paper makes a systematic attempt to develop comprehensive recommendations on ensuring financial stability for commodity-based economies in conditions of high mobility of cross-border capital. The focus is on the structural vulnerabilities and experience of Russia and the largest African countries (South Africa, Egypt, Algeria, Nigeria, Morocco), their dependence on the dynamics of commodity markets and the risks associated with “hot capital”. The purpose of the study is to form an adaptive capital flow management model aimed at selectively stimulating long-term investments and minimizing the destabilizing effects of short-term speculation. The interrelationships between the structure of obligations of the international investment position of the countries under consideration and the choice of adequate regulatory measures are considered. The article aims to critically analyze the negative consequences of unregulated capital flows for economic sovereignty; development of specific legislative and institutional proposals for the creation of a multi-level protection system, including differentiated regulation, tax instruments and interdepartmental coordination; as well as an assessment of the potential of international cooperation within the framework of integration associations (BRICS, EAEU) to strengthen financial stability. Methodologically, the study is based on a comparative analysis of macroeconomic data, the structure of balance of payments and the international investment position of the target countries, as well as a generalization of their crisis experience and existing regulatory practices. The scientific and applied significance of the work is determined by the need for a practice-oriented model that allows countries with emerging markets and commodity orientation to move from passive adaptation to proactive and strategic capital flow management. The proposed recommendations are aimed at strengthening financial sovereignty, reducing vulnerability to external shocks and creating conditions for long-term economic diversification.

Keywords: financial stability, international capital movement, capital management, emerging markets, commodity economies, regulatory measures.

JEL Classification: F32, F38

For citation
Arkhipov A.D. Ensuring financial stability in conditions of capital mobility: recommendations based on the experience of Russia and African countries. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 81–90. https://doi.org/10.65324/wewf022

There is a strong deficit of infrastructure financing to achieve the UN Sustainable Development Goals (SDGs). This justifies the importance of a special institution for attraction of long-term capital investments in developing economies and in particular, in BRICS+ countries. In particular, it is important to narrow the investment gap in African countries, which are an essential part of BRICS+. So far, the region’s demand on capital investment is less covered by investors supply compared to other BRICS+ countries. World Bank Group estimates the investment gap in low- and middle-income countries at 4 trillion US dollars. The article considers macroeconomic barriers for capital inflows into African countries: foreign exchange rate volatility of national currencies and high credit risk. Another issue discussed in the paper is growth of debt burden in BRICS+ economies. In addition, it is less effective to attract funding from financial market in African countries than in other BRICS+ countries, which restricts capital flows. This leads to higher borrowing costs for infrastructure projects realization. The article provides rationale of international development banks’ advantageous position for scaling-up infrastructure investments in BRICS+. The article considers main features of international development banks: preferred creditor status and access to funding in national currencies. The paper discusses advantages of multilateral development banks’ capital structure. In particular, the paper analyses opportunities of callable capital to lower credit risk for investors. Also, the article discusses options for further scaling-up of infrastructure investment in African countries, which includes wider use of guarantees along with back-to-back financing mechanism. Proposed mechanisms could multiply the volume of infrastructure investments in BRICS+ countries, and in particular in African countries — Egypt, Ethiopia and Iran — by lowering the borrowing costs and minimizing foreign exchange risk.

Keywords: multilateral development banks, BRICS+, infrastructure investments, foreign exchange risk, credit risk, callable capital, back-to-back financing, international debt.

JEL Classification: F02, F15, F36

For citation
Berezin A.М. The Role of International Development Banks in Addressing the Investment Gap of BRICS+ African Countries. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 91–98. https://doi.org/10.65324/wewf023

This paper examines various pathways to achieving public debt sustainability in African countries. Focusing on the Zambian economy, where debt burdens have surged to over 91.1% of GDP on average by 2025, per IMF estimates, threatening economic stability and development prospects. The study identifies key economic strategies for managing these burdens—such as fiscal discipline through revenue mobilization and expenditure controls, alongside debt restructuring via mechanisms like the G20 Common Framework—while addressing entrenched governance challenges that exacerbate vulnerabilities. Using descriptive case studies from a range of African countries, including Zambia, Ghana, Malawi, Ethiopia, and Rwanda, the paper outlines key policies that impacts economic development of African countries (e.g., debt service crowding out infrastructure due to high percentage rate), social spheres (e.g., austerity fueling unrest), and environmental challenges (e.g., resource extraction for repayments worsening climate risks). The analysis draws on policy approaches such as fiscal discipline and debt restructuring, with a particular focus on economic, social, and environmental impacts. This study also explores factors such as deficiencies electoral systems, expenditure-to-income ratios, energy crises, and corruption, and uses case studies to elucidate the causal relationships between citizen, social, and environmental factors. The study concludes that stabilizing public debt in Africa requires a comprehensive approach, integrating macroeconomic measures (such as debt restructuring and fiscal reform) with significant progress in public governance.

Keywords: public policy and regulation, debt sustainability, economic growth, Africa, world economy.

JEL Classification: F42, G18, H6, H63

For citation
Mulenga R. Pathways to Public Debt Sustainability in African Countries. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 99–107. https://doi.org/10.65324/wewf024

The relevance of the study is due to the importance of creating an alternative financial architecture for international settlements to the West in order to strengthen financial and economic ties between Russia and friendly countries in the context of the sanctions policy of developed countries. The subject of the study is the financial mechanisms of economic cooperation between Russia and the countries of the North African region. The purpose of the study is to identify opportunities for the development of financial and economic relations between Russia and the countries of North Africa based on the use of digital financial technologies. The purpose of the study is to analyze the possibility of using digital financial technologies to intensify financial and economic ties between the Russian Federation and the countries of North Africa in the context of sanctions restrictions. The article uses methods of system analysis, synthesis, scientific abstraction and logical generalization. The paper notes that North Africa, despite the differences between the countries studied in the level of development of financial systems and regulation of the banking sector, is a region with high potential for the development of digital financial technologies. The article concludes that in modern conditions a differentiated approach is required for the development of financial and economic relations between Russia and the countries of North Africa. The main task of the Think Tank will be the development of new decentralized solutions in the field of financial technologies and money circulation, as well as ensuring the export of Russian financial technologies and their implementation in the countries of the North African region.

Keywords: financial cooperation, banking system, Russia, digital currencies of central banks, digital financial technologies, financial sovereignty.

JEL Classification: F30, F36

For citation
Mikhailishin A.Y., Mamedov T.N. Analysis of the possibility of using digital financial technologies in the development of Russia’s international financial and economic relations with North African countries. World Economy and World Finance, 2026, vol. 5, no. 1, pp. 108–116. https://doi.org/10.65324/wewf025