Over the past several years, many African tax authorities have deepened their technical capacity, and, thanks to information-sharing and technology advances, now have unprecedented access to taxpayer information. Against a backdrop of global uncertainty and regional economic pressures, this year’s annual report on transfer pricing (TP) in Africa report from specialist African TP firm Graphene Economics suggests that multinationals should expect elevated scrutiny, more assertive enforcement, and greater emphasis on data quality across the continent.
The report, titled Towards operational clarity – TP trends for 2025 and beyond, combines data from the annual Graphene Economics TP Matters survey with commentary from African and international tax and economic specialists. While it highlights several TP-specific developments, its broader conclusions point to structural shifts in how African economies approach revenue collection, risk management and business regulation.
Shifting global landscape shaping African tax priorities
Global macroeconomic conditions in 2025 have created both opportunity and pressure for cross-border operations. Inflation is moderating, interest rates are easing, and financing conditions are improving across many African markets. At the same time, profitability remains under strain due to persistent geopolitical instability, which continues to feed volatility in markets and policy direction.
Adding to these pressures is the re-emergence of United States trade tariffs on China, Mexico and key manufactured goods. These measures are reshaping global supply chains, raising input costs and slowing global trade growth. For African economies, the spillovers are varied: higher commodity price volatility, shifting investment flows, the potential redirection of manufacturing activity, and adjustments to sourcing and logistics patterns.
“These global tensions are filtering through to African markets in very real ways,” says Michael Hewson, founder and director of Graphene Economics. “When liquidity is tight, public debt is high and investment sentiment is uncertain, governments turn to the levers they can control. One of those levers is revenue collection, and transfer pricing becomes an important part of that effort.”
A tougher environment for African multinationals
Graphene Economics’ survey findings show that TP and related tax matters are increasingly being escalated to chief financial officers and boards, reflecting their growing relevance for financial resilience and operational risk management.
Across African jurisdictions, revenue authorities are:
- Increasing audit frequency and sophistication
- Leveraging expanded information-sharing networks
- Integrating data analytics into risk assessment
- Challenging profit volatility even where commercial explanations exist
- Focusing on the level of substance in offshore entities
- Testing intercompany financing arrangements more aggressively
This trend is consistent with broader macroeconomic realities. Hewson notes that high public debt levels limit fiscal space and infrastructure investment, prompting a renewed push for revenue. Simultaneously, implementation of the OECD’s Base Erosion and Profit Shifting reforms (particularly the global minimum corporate tax under Pillar Two) is a key consideration for very large multinational enterprises and raising compliance expectations.
“Multinationals operating in Africa need strong, coherent TP policies that align with the commercial realities of their businesses,” says Hewson. “Authorities are no longer just checking documentation; they’re interrogating value chains, decision-making structures and economic substance. The level of detail requested is increasing, and the tolerance for inconsistencies is decreasing.”
Africa’s resilience, and new opportunities
Despite these pressures, the report highlights growing resilience in several African economies. Diversifying production bases, improvements in transparency, the integration of ESG considerations, and the regionalisation of supply chains are creating new growth avenues. The shift toward “friend-shoring” and closer intra-African trade relationships may offer long-term benefits for multinationals prepared to invest in local markets.
Looking ahead, competitiveness rather than tax incentives alone is expected to shape investment attractiveness across the continent. Businesses that prioritise financial resilience, operational clarity and robust governance will be better positioned to navigate an environment where tax risks form an integral part of strategic planning.
Proactive tax planning
Hewson argues that organisations need to adopt a more forward-looking approach to managing cross-border tax matters.
“TP is no longer solely a compliance function,” he says. “It sits at the intersection of economics, regulation and strategy. Multinationals that understand this, and that invest in documentation, data quality and cross-functional alignment, will be better equipped to respond to scrutiny and avoid unexpected disputes.”
The full report explores detailed TP developments from across Africa, the implications of recent court cases, emerging trends linked to digitalisation and ESG, and practical recommendations for multinationals preparing for 2025 and beyond. Download it here.