African finance leaders face rising costs as global uncertainty clouds outlook

African finance executives are contending with a squeeze on operating costs, stubborn inflation and broader global uncertainty, as geopolitical tensions continue to dent business confidence. That is according to the latest Global Economic Conditions Survey (GECS) from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).

The quarterly survey, carried out between June 3 and June 17, found that more than three-quarters of accountants worldwide reported higher operating costs in the second quarter of 2026 — the highest share recorded since the survey began. Among chief financial officers specifically, 83% said costs had increased, a jump of over 20 percentage points from the prior quarter.

The results point to the lingering effects of geopolitical friction, supply chain disruption and elevated commodity prices on companies globally, even as sentiment showed tentative signs of recovering from earlier lows.

Business confidence ticked up modestly in the second quarter after nearing record lows earlier in the year, though it remains below its long-run average — a sign that uncertainty over the wider economic picture has not lifted.

Activity indicators also softened: global new orders, capital expenditure and employment all weakened over the quarter. That doesn’t point to a sharp downturn, but it does suggest firms are turning more cautious on hiring, investment and expansion plans.

Performance diverged by region. Sentiment stayed subdued across North America and Western Europe, while Asia-Pacific staged a notable rebound, helped by resilient economic activity, growing tech investment and demand tied to the rapid build-out of artificial intelligence.

Africa was not broken out as a standalone region in the survey, but many of the global patterns it captures are likely to ripple through African economies, which remain closely bound to international trade and commodity cycles.

Rising demand for critical minerals, renewable energy projects and digital infrastructure could open new opportunities for the continent. At the same time, businesses are still contending with inflation, costlier financing and external shocks.

Inflation and borrowing costs remain key concerns

Economic pressure emerged as the top business risk worldwide, cited by 22% of respondents, ahead of geopolitical instability (20%) and cybersecurity threats (14%). Respondents also flagged responsible AI adoption, stronger cyber resilience and improved governance as rising priorities.

Inflation expectations climbed sharply too: nearly 72% of respondents expect inflation to rise in their country over the next three months, citing commodity prices, transport costs and supply chain strain.

Meanwhile, 42% expect interest rates to rise over the same period, up from just 16% in the final quarter of 2025 – a sign that businesses are bracing for further monetary tightening as central banks work to contain inflation.

For many African economies, where borrowing costs are already elevated, further rate increases could weigh on private-sector investment and push financing costs higher still, adding urgency to careful financial planning and disciplined capital allocation.

“The AI boom is helping prop up the global economy and financial markets, but how the Middle East situation evolves in the coming months will matter a great deal – progress there would support global growth in the second half of 2026, while renewed hostilities and an oil-price spike would quickly bring downside risks back into view,” said Alain Mulder, Senior Director of Europe Operations and Global Special Projects, IMA

Jonathan Ashworth, ACCA’s Chief Economist, said rising operating costs remain among the biggest challenges facing businesses. He noted that if firms increasingly pass those costs on to consumers, it would raise the risk of further monetary tightening by major central banks.

Ashworth added that policymakers would be watching closely for diplomatic progress in the Middle East and a sustained pullback in oil prices, developments that could ease the pressure for additional rate hikes later this year.

The survey points to a growing strategic role for finance leaders as organisations navigate a more uncertain environment. Beyond traditional financial reporting, accountants and CFOs are increasingly tasked with strengthening resilience, steering investment decisions and supporting digital transformation.

As African economies push forward with industrialisation, expand regional trade under the African Continental Free Trade Area (AfCFTA) and accelerate digital adoption, finance leaders are expected to play a central role in weighing near-term economic pressure against long-term growth and competitiveness.

ACCA IMA Inflation Interest Rates AfCFTA African Economy