Paper on Tariffs Imposition on Exports to the United States Market

With the actions of other major economies beyond the control of Africa, it is crucial that Africa focuses inwards and strengthens trade within. Intra-African trade has improved over time, but there is still much to be desired. As of 2023, intra-African trade was about 16% of Africa’s total trade with the rest of the world. That was well behind North America at 31%, and even further from the EU and Asia, where intra-regional trade stood at 68% and 58% respectively. Moreover, intra-African trade remains highly concentrated. Just two countries, South Africa and Côte d’Ivoire, account for approximately 30% of intra-African trade.
West Africa ranks as the second-largest trading bloc, behind Southern Africa. In the West African subregion, Ghana contributed 3.8% to intra-African trade in 2024 after Côte d’Ivoire and Nigeria. In spite of this relatively low figure, Ghana recorded trade surpluses with its neighboring countries: Burkina Faso, Togo, and Côte d’Ivoire, in 2024. Overall, there is a need for policy to deepen regional integration and promote a more balanced continental growth.

While we advocate for increased intra-African trade, it is also important to take a critical look at the continent’s trade profile, which is dominated by raw commodities. This reliance on commodity exports makes Africa susceptible to global price fluctuations and does not ensure a stable source of foreign exchange earnings. It could also explain the historically low levels of intra-African trade. Naturally, if nearly all nations within the continent are commodity exporters, it follows logically that the final destinations will be industrialized economies.

Also, because of the high volumes of commodity exports from Africa, it is quite alarming that close to 60% comes from fuel and minerals. Beyond the detrimental effects of these extractive industries, Africa has struggled to maximize the gains because it lacks the necessary technical and financial capacity to either negotiate favorable deals or exploit these resources on their own. This situation presents significant challenges to sustainability and underscores the need for substantial initiatives toward diversification and industrialization across the continent.

We believe Africa can assert itself by implementing gradual, public sector-led import substitution strategies, starting with the most fundamental step: achieving food self-sufficiency. This means targeting key agricultural products that dominate Africa’s import bills and producing them locally. To achieve this, African countries can adopt efficient agricultural models and modify them to meet local needs. According to the Food and Agriculture Organization (FAO), the agricultural sector employed nearly 50% of Africa’s workforce in 2022. This ratio rises to almost 70% when all actors in the agrifood system (from farm to table) are included.
On the contrary, only 5% of Europe’s workforce is engaged in agriculture, and yet they can adequately feed themselves and export to other regions, particularly Africa. The distinction is simply that these advanced economies operate on a large scale in the agriculture sector, leveraging advanced technology and economies of scale. The World Bank reports that the agricultural sector is twice as effective as any other sector in reducing poverty and supporting growth, which comes as no surprise given that close to 60% of the African population relies on agriculture for income.
To alleviate poverty in Africa, governments must be more actively involved in agriculture than ever before. Substantial investment in research and development in the sector is essential, with active engagement from all relevant stakeholders. Governments must take a leading role by consolidating farmlands, mechanizing operations, and creating the infrastructure needed to scale-up production efficiently.
Also, despite numerous efforts to promote regional integration in Africa, progress has been slow. For instance, ECOWAS has proposed the introduction of a single currency since 2003 to strengthen economic ties. This aspiration has still not been realized because member states have been unable to meet the convergence criteria set for member states as a necessary condition that would make it possible.
While monetary integration is stalling, ECOWAS and the other sub-regional bodies in Africa should rather focus on improving trade networks across the region. One way to do this is by optimizing trade routes.
For instance, the distance between Paris and Amsterdam is more than twice that between Accra and Lome, yet travelling to Amsterdam from Paris takes less time than travelling from Accra to Lome. This efficiency is largely due to the availability of well-developed means of transport within Europe, unlike in Africa, which affects trade within the continent.
To change this, roads, railways and ports must be improved to create an environment conducive to expediting trade flows throughout the continent. A strategic plan to streamline the movement of goods and people across Africa can serve as a significant boost to intra-regional trade by cutting transaction costs and improving access to regional markets.

The AfCFTA is a strategic vehicle in this regard and governments and industry players alike must supercharge its implementation. Governments must expedite the reduction of trade barriers within Africa under AfCFTA to enable countries to rely more on regional markets. This will insulate African economies from external shocks like United States. tariffs and make Africa more resilient through diversified intra-continental trade. With a unified market of some 1.4 billion people, AfCFTA positions Africa as a competitive and unified trade bloc, and a real alternative destination for FDI looking to diversify from the markets involved in the trade war.
This creates opportunities for attracting FDI in manufacturing, logistics, and services and Africa must endeavor to explore them. Further, the continent’s collective strength also means Africa will be less vulnerable to punitive tariffs and better placed to negotiate favorable terms of trade with our partners.

As governments work to reduce trade barriers, industry players must turn their attention to the continental market. Opportunities abound to compensate for reduced exports to tariff-affected markets like the United States. by growing the African “customer base” that remains tasty for Africa’s goods to mitigate external shocks to demand. Companies can explore sourcing raw materials, components, and services from within the continent under the AfCFTA to reduce our reliance on imports and exposure to international price volatility induced by tariffs.

Lastly, but most importantly, we expect to see more industries taking advantage of AfCFTA to form partnerships and joint ventures that enables collaborative production, distribution and innovation on a scale. Africa’s industries can and should become more competitive globally by pooling resources, accessing regional infrastructure, and benefiting from economies of scale.