African nations can weather the potential fallout of US President Donald Trump’s tariffs by increasing trade among each other, according to the head of a bank that operates in 35 countries on the continent.
Trump’s tariffs will supersede the African Growth and Opportunity Act that about 30 nations used to develop export-oriented industries such as apparel. Countries in sub-Saharan Africa exported $29 billion of goods in 2023 to the US, making it the region’s largest market after China, United Arab Emirates and India.
While the US isn’t the largest market for Africa, the continent’s economies could be affected if the tariffs prompt major trading partners such as China to reduce demand for Africa’s exports, Ecobank Transnational Inc. Chief Executive Officer Jeremy Awori said in an interview with Bloomberg TV. “Now more than ever we should be focusing as African countries on how do we trade more together, how do we create an easier framework for us to trade.”
Trump’s trade war is a reason to accelerate the implementation of the African Continental Free Trade Area, which came into force in October 2022. The World Bank estimates that the pact could expand exports by $560 billion. But fully executing the accord has been hampered by negotiations on key terms. Intra-African trade grew 3.2% to $192 billion in 2023, accounting for 15% of total African trade that year.
Apart from implementing AfCFTA, Awori said the region must work to remove non-tariff barriers such as visa requirements for travelers and the structural bottleneck posed by landlocked countries.
Trade Within Africa Sees Steady Growth
Higher tariffs followed the freezing of aid by Trump earlier this year, which itself could push 6 million people in the continent into extreme poverty, according to studies done by Ecobank, Awori said.
The African Development Bank last year projected the continent’s economic growth would accelerate to 4.3% this year from an estimated 3.7% in 2024. That target is now looking difficult amid the tariff war that has cratered markets and raised the risk of recession in the US.
Tariff imposed on African countries range from 10% for countries such as Liberia, Benin, Kenya and Cape Verde, to 50% for the kingdom of Lesotho, the highest on any sovereign.
Fully implementing the free trade accord and adding value to raw materials will ensure that the continent keeps “more of the benefits, creates more jobs and uplifts the lives and livelihoods of Africans,” he said.
In Nigeria, the continent’s most populous nation, Trump’s tariffs threatens exports to the United States, which amounted to about $6 billion annually in the past two years, according to Industry Trade and Investment Minister Jumoke Oduwole. He also said the situation was an opportunity to increase intra-African trade.
- Bloomberg
