As the world moves deeper into the post-pandemic era, trade agreements are supposed to provide stability and growth. However, the reality is far more complex. In February 2026, numerous international trade agreements face scrutiny over their true benefits, particularly the partnership forged between the Asia-Pacific Economic Cooperation (APEC) nations and the African Continental Free Trade Area (AfCFTA). As economic landscapes shift, these agreements reveal mispriced risks that could destabilize economies if left unaddressed.
The Current Landscape: APEC and AfCFTA
The APEC forum, consisting of 21 countries, has traditionally focused on creating free trade zones among Pacific nations, providing a platform for economies such as the United States, China, and Japan. Contrastingly, AfCFTA, established in 2021, aims at boosting intra-African trade and economic cooperation among its 54 member states. The formalization of their recent trade agreement in late 2025 sparked high hopes for mutual growth, yet embedded risks lie in their fiscal implementation and political cohesion.
Financial Commitments and Productive Capacity
The monetary commitment made by APEC nations to invest $250 billion in African infrastructure over the next 5 years raises critical questions. While it appears substantial, this figure masks potential volatility. According to data from the African Development Bank, Africa requires $130–170 billion annually for infrastructure alone. A potential overshoot in these investments could lead to a misallocation of resources, harming domestic economies that are not ready to absorb foreign capital.
Moreover, the highlighted benefits predict a surge in exports of commodities from Africa, especially agricultural products. This alters existing dynamics and introduces systemic risks. In 2025, the UN reported that Africa accounted for only 1.4% of global agricultural exports. Over-reliance on commodity exports could make African economies vulnerable to price shocks, particularly as climate variability affects agricultural output.
Geopolitical Tensions: An Underestimated Factor
Experts like Dr. Lila Mensah, an international political economist at the University of Ghana, emphasize that political risk may outweigh economic benefits of the trade agreement. The rapprochement between APEC and AfCFTA has come amidst rising geopolitical tensions between global powers. Additionally, the Chinese Belt and Road Initiative (BRI) has dissected priorities, as nations like Ethiopia, which are already heavily reliant on BRI-led investments, must juggle competing foreign influences.
“These new agreements can often overshadow the unyielding political instabilities that exist in many African states. Underestimating these factors leads to misaligned investments that can backfire,” she warns.
The Prediction Dilemma: Not Just Short-Term Gains
Firms and investors must reassess their predictive modeling. The rush to capitalize on trade agreements may ignore underlying risks associated with inflationary pressures post-COVID-19 and burgeoning debt levels in African nations. According to the International Monetary Fund (IMF), in 2026, African countries’ combined debt-to-GDP ratio is projected to reach 68%. This surge could erode purchasing power, hindering growth in the lucrative markets anticipated under the new trade framework.
Aligning business strategies solely on optimistic trade projections without a plan to mitigate geopolitical and economic risks could jeopardize long-term viability.
A Contrarian Perspective: Opportunities Hidden within Risk
While negatives dominate the narrative, there is room for strategic, circumspect investments. Industry leaders are now recognizing environmentally sustainable trade as both an ethical commitment and an economic imperative. Companies responsive to climate risk can contribute to growth while minimizing exposure to market volatility.
With the projected global green technology market expanding to $37 trillion by 2040, as stated by McKinsey & Company, African countries with nascent renewable energy potential can position themselves favorably in trade agreements which emphasize sustainability. By indeed fostering these innovations rather than traditional exports, they can hedge against real market risks and gain resilience against price fluctuations.
Conclusion
Trade agreements like that of APEC and AfCFTA embody both promise and peril. Stakeholders must engage in a deeper analysis of risks rather than accepting surface-level benefits. Enhanced collaboration, with a focus on social and environmental governance, may reveal pathways to sustainable economic growth resolved through recognized mispricing of risk in these evolving dynamics. Looking ahead, it is incumbent upon policymakers and investors alike to navigate these waters with foresight, balancing the excitement of potential gains against the reality of intricate global complexities.
