Country surrounding grand African city (5)
I believe the answer is:
lagos
'african city' is the definition.
(Nigerian city)
'country surrounding grand' is the wordplay.
'country' becomes 'laos' (Laos is an example).
'surrounding' is an insertion indicator.
'grand' becomes 'g' (G is short for grand as in a thousand).
'laos' going around 'g' is 'LAGOS'.
(Other definitions for lagos that I've seen before include "Formerly capital of Nigeria" , "Former Nigerian capital" , "African port" , "Largest city and once capital of Nigeria" , "African city" .)