Africa-Press – Gambia. This year, we celebrate Africa Day in the midst of a global geopolitical landscape that is shifting in an uncertain and alarming way. Rising protectionism is disrupting access to essential goods for our nations and creating global trade tensions, whilst the international development architecture is struggling to offer solutions that match the scale and complexity of our continent’s challenges. This critical moment compels us to reflect on Africa’s current global economic standing, as well as its collective strength and resilience.
The Africa Day annual commemoration serves as a powerful reminder of the continent’s unity, potential, and unwavering commitment to shaping its own economic and developmental destiny despite the crisis its faces—soaring trade deficits, unsustainable debt, and volatile currencies. Within this salient challenge lies an unprecedented opportunity to redefine Africa’s role in the global economy. The time is ripe for African nations to seize this moment and shape their economic destiny with purpose and foresight.
The Crisis: Protectionism and Its Toll
The United States’ recent decision to impose tariffs on imports from several African countries, including over 40% on imports from Lesotho, Madagascar, and Mauritius has sent shockwaves across the continent. These measures effectively nullify the tariff waivers previously granted under the African Growth and Opportunity Act (AGOA), a trade law that provides eligible African countries with duty-free access to the U.S. market. AGOA has been a vital lifeline for many African economies, boosting exports and fostering economic growth, and the new tariffs threaten to undermine these gains.
In 2024, exports supported by AGOA totaled approximately $8.4 billion. Although these exports accounted for only 1.1% of the total exports of participating countries, some nations—such as Lesotho, where AGOA goods comprise 17% of exports, and to a lesser extent Madagascar (7.2%) and Nigeria (6.2%)—are heavily dependent on this trade scheme. The recent imposition of tariffs signals a troubling shift that threatens to reverse the progress made over the past two decades under this trade pact, risking regional economic stability and growth.
Beyond the direct effects, the broader impacts of protectionism and policy uncertainty on Official Development Assistance (ODA), investment flows and the overall global economy are even starker. Global growth is projected to drop to 2.8 percent in 2025 and 3 percent in 2026—down from pre-tariff projections of 3.3 percent for both years. Sub-Saharan Africa’s growth projections for the year 2025 have also witnessed a downward revision of 0.4 percentage points (IMF Regional Economic Outlook 2025).
Commodity prices, particularly crude oil, are set to decline by about 12 percent as weakening global growth weighs on demand. Between April 2 and April 8, the price of Brent crude oil declined by a little more than $12 per barrel—the 11th-worst four-day price performance since 1990. For the continent, these developments signal slower growth, shrinking export revenues, declining reserves, fiscal contraction, tighter financing conditions, and ultimately, heightened debt vulnerabilities.
Currently, 24 African countries are either in overall debt distress or at high risk of overall debt distress. Africa’s annual trade deficit widened by 41 percent to $66.6 billion in 2023, according to Afreximbank (AfDB). This hemorrhage of foreign reserves forces nations to borrow in hard currencies, deepening debt vulnerabilities. Additionally, the continent’s heavy reliance on export of raw materials—such as unprocessed coffee, which accounts for 80% of Ethiopia’s exports, and critical minerals like cobalt, making up approximately 60% of the Democratic Republic of Congo’s export revenue—leaves African economies particularly vulnerable to volatile commodity prices. This dependence often leads to currency devaluations and rising inflation, stalling economic progress and amplifying poverty across the region.
The AfCFTA: A Path to Resilience
Amid these headwinds, the African Continental Free Trade Area (AfCFTA) emerges as the continent’s most potent tool for self-reliance. While intra-African trade languishes at just 15-18% of total trade—far below the 60% in Asia and 70% in Europe—its composition reveals untapped potential. Manufactured goods account for 45% of intra-African trade, more than double the 20% share in exports to the rest of the world, according to the United Nations Economic Commission for Africa (UNECA).
Countries like South Africa, Egypt, and Morocco are already leading the way, with over 50% of their manufactured goods destined for regional markets. Sectors such as automobiles, processed foods, and pharmaceuticals are driving this growth, proving that Africa can industrialize by leveraging its own demand. Furthermore, the continent’s manufacturing output has been growing at an average annual rate of approximately 5%, signaling a shift toward greater regional self-sufficiency. The lesson is clear: regional integration is not just an ideal, it’s an economic imperative that can unlock sustainable growth and reduce vulnerability to global shocks.
Turning Threats into Opportunity
The U.S.-China trade war offers a cautionary tale—and a blueprint for the continent. During the 2018 trade war, countries like Vietnam and Mexico capitalized on the disruption by positioning themselves as alternative manufacturing hubs. Africa, with its vast labor force and expanding consumer market, can replicate this success—but only if it acts swiftly.
Industrial corridors, such as Nigeria’s Lekki Free Trade Zone and Ethiopia’s Special Economic Zones, are critical to attracting firms displaced by protectionism. These zones must be scaled up, with a focus on value-added production. Africa already supplies 30% of the world’s critical minerals, including cobalt and lithium. Yet, it captures only a small share of their final value.
A joint Africa-U.S. beneficiation pact could change that. Processing resources locally would create jobs, build industries, and keep wealth within the continent. Africa’s natural advantages, if turned into strategic assets, can transform threats and uncertainties into growth opportunities. Time is of the essence—prompt action can shape Africa’s industrial future.
Policy Levers for Change
To harness this momentum, African governments must implement four key strategies, with the creation of the African Union Development Fund (AUDF), led by the African Union Development Agency, as a key driver of the changes.
Africa stands at a crucial turning point in its development financing landscape, as leaders gathered in Luanda, Angola, recently, to push forward the establishment of the African Union Development Fund. Chaired by President João Manuel Gonçalves Lourenço, this high-level meeting brought together key stakeholders—including the African Union Commission (AUC), AUDA-NEPAD, and the Alliance of African Multilateral Financial Institutions (AAMFI)—all committed to a singular vision: creating a dedicated, African-led mechanism to fund the continent’s transformative Agenda 2063.
With Decision 818 of the AU Assembly of Heads of State and Government as its foundation, the AUDF is set to bridge critical financial gaps, ensuring that Africa no longer relies solely on external sources to drive essential sectors such as infrastructure, energy, agriculture, health, and industrialization. The meeting reinforced an urgent reality—Africa must control its own developmental trajectory through sustainable, sovereign financing.
What makes the AUDF distinctive is its collaborative nature—designed not as a rival to existing financing institutions, but as a unifying force to amplify them. It is not about competition but connectivity, ensuring that political vision aligns with capital deployment and technical expertise. By consolidating Africa’s financial architecture into a cohesive platform, the AUDF aims to unlock large-scale, results-driven development. Its proponents argue that true economic sovereignty lies not only in policy decisions but in the ability to mobilize homegrown resources for long-term growth.
First, domestic resource mobilisation is non-negotiable. Tax exemptions for multinational corporations result in an estimated $30-40 billion in lost revenue annually across Africa. Digitising tax systems and deploying AI to detect fraud could plug these leaks. Rwanda’s successful e-filing system recovered over $200 million in unpaid taxes within its first year. Similarly, Egypt has significantly improved its tax revenue collection by modernising customs and tax systems, adding nearly $10 billion annually to the national coffers.
Second, corruption must be tackled head-on. Publishing performance rankings and accountability scores of public agencies, as Kenya has done with its procurement authority, can shame laggards into reform. Ghana’s “Asset Declaration” system, which publicly documents officials’ assets, has further strengthened integrity. Across Africa, expanding such measures can boost investor confidence and improve service delivery.
Third, regional procurement should be scaled up and standardized. During the pandemic, Africa pooled demand for vaccines, slashing costs. The same approach can be applied to essentials like fertilizers and pharmaceuticals.
Finally, trade policy must serve Africa first. The continent spends $50 billion annually importing food it could produce itself, according to the AfDB. Redirecting this demand inward would shield economies from global shocks. Countries like Ethiopia, Rwanda, and Senegal are already making progress in rice self-sufficiency through targeted investments, illustrating that regional food security is achievable. Redirecting spending inward would strengthen resilience, create millions of jobs, and reduce Africa’s dependence on volatile global markets.
The Road Ahead
The world is undergoing a profound shift, and Africa stands at a crossroads: remain a bystander or boldly carve its own path. The AfCFTA provides a powerful framework, but implementation is lagging. Non-tariff barriers, inadequate infrastructure, and bureaucratic red tape continue to stifle progress.
As I say often in every given opportunity every kilometer of rail Africa builds should use African steel. Every school uniform should be stitched in African factories.” This vision is not protectionism—it’s pragmatism and strategic self-reliance.
With AGOA’s future under threat, the time for half-measures is over. Africa’s economic sovereignty hinges on its ability to deepen regional integration, foster innovation, and secure a seat at the global decision-making table.
The world is retreating; this is Africa’s moment to lead, to unite, and to build a resilient, self-sufficient continent. The path forward is clear: Africa must act now—this is its time to rise.
By
African Business
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