'We are on our own'- Africa looks within to weather growing global tariff turmoil
The African Continental Free Trade Area pact designed to unify all 1.4 billion people under Africa's more than 50 nations into a single market, has been legally ratified by 49 countries and officially launched trading in 2021.
But translation into action has been sluggish, with less than half of member states actively trading under the framework.
The World Bank estimates AfCFTA could increase Africa's intra-continental exports by 81% and proponents point to last year's 12.4% boost in intra-African trade, to $208 billion, according to Afreximbank figures, as early signs of success.
"We've got to accelerate the establishment of our own value chain systems. What we are observing now — the weaponisation of trade policy, investment policy, nationalism — is unprecedented and it has a very negative impact on the multilateral trading system," AfCFTA Secretary-General Wamkele Mene told Reuters.
"The lesson to observe is that we are on our own as a continent."
U.S. President Donald Trump's return to the White House in January put trade relations centre-stage for policymakers worldwide, with his breathless cycle of punitive tariff policies poised to upend decades of globalisation and reshape flows of money and goods.
G20 finance chiefs meeting in Durban this week, under South Africa's presidency, have trade high on the agenda.
But despite the urgent need to boost African continental trade, accelerating it is beset with challenges.
African Union countries have a combined GDP of some $3 trillion - not far off the size of France's economy, a G7 nation.
So far, 24 countries are officially trading under AfCFTA, Mene said, including South Africa and Nigeria.
Implementation has been inconsistent, said Raheema Parker of Oxford Economics, with weak governance undermining overall effectiveness and informal trade adding complexities.
"These barriers are especially pronounced in smaller sub-Saharan economies, which are more vulnerable to external shocks and often lack the administrative and financial capacity," Parker said.
The biggest constraint to intra-Africa trade is an infrastructure deficit, Mene said.
The African Development Bank and Afreximbank collectively invested $65 billion in infrastructure projects since 2020 - barely making a dent in the $100 billion plus estimated annual infrastructure investment shortfall.
Johannesburg-based Standard Bank CEO Bill Blackie warned that "without hardened bridges and faster rail links, AfCFTA will remain a paper promise."
Other barriers include border delays and complex paperwork requirements.
"We need to diminish all the commercial barriers," said Chad's ex-finance minister Abbas Mahamat Tolli.
Currency is also contentious; nearly two-thirds of payments across more than 40 African currencies are clearing through dollar corridors. Afreximbank has called for a shift away from the dollar, citing volatility and high fees.
"Local-currency corridors must become the norm to slash costs and tame volatility," said Afreximbank group chief economist Yemi Kale.
The recently launched Pan-African Payments and Settlement System links 16 central banks and aims to reduce costs.
Leaders say AfCFTA's transformative potential is worth tackling the challenges.
"We have a generational chance to build value chains that keep wealth on the continent, develop competitive industries, and create millions of jobs while shaping global supply chains from a position of strength," Kenyan President William Ruto said earlier this month.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
30 minutes ago
- Reuters
Stocks slump on latest tariffs, soft jobs data
NEW YORK, Aug 1 (Reuters) - U.S. stocks slumped on Friday, with the S&P on track for its biggest daily percentage decline in more than three months as new U.S. tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure. Also weighing on equities was a tumble in (AMZN.O), opens new tab shares after the company posted quarterly results but failed to meet lofty expectations for its Amazon Web Services cloud computing unit. Just hours before the tariff deadline on Friday, President Donald Trump signed an executive order imposing duties on U.S. imports from countries, including Canada, Brazil, India and Taiwan, in his latest round of levies as countries attempted to seek ways to reach better deals. Further denting confidence in the economic picture, data showed U.S. job growth slowed more than expected in July while the prior month's report was revised sharply lower, indicating the labor market may be starting to crack. The report significantly pushed up expectations the Federal Reserve will cut interest rates at its September meeting. "There's no way to pretty-up this report. Previous months were revised significantly lower where the labor market has been on stall-speed," said Brian Jacobsen, Chief Economist at Annex Wealth Management in Menomonee Falls, Wisconsin. "Last year the Fed messed up by not cutting in July so they did a catch-up cut at their next meeting. They'll likely have to do the same thing this year." According to preliminary data, the S&P 500 (.SPX), opens new tab lost 101.60 points, or 1.60%, to end at 6,237.79 points, while the Nasdaq Composite (.IXIC), opens new tab lost 472.78 points, or 2.24%, to 20,649.67. The Dow Jones Industrial Average (.DJI), opens new tab fell 543.97 points, or 1.23%, to 43,587.01. Market expectations the Fed will cut rates by at least 25 basis points at its September meeting stood at 80.9%, according to CME's FedWatch Tool, opens new tab, up from 37.7% in the prior session. Other data from the Institute for Supply Management showed U.S. manufacturing contracted for a fifth straight month in July and factory employment dropped to the lowest level in five years. Both the S&P 500 and the Nasdaq recorded their biggest single-day percentage declines since April 21 and all three major indexes were on track for weekly losses. The CBOE Volatility Index (.VIX), opens new tab, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June 23. Amazon was the biggest drag on the Dow, S&P 500 and Nasdaq and pushed the consumer discretionary index (.SPLRCD), opens new tab, down nearly 4% as the worst performing of the 11 major S&P 500 sectors. Also reporting earnings was Apple (AAPL.O), opens new tab, which fell after it posted a current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned U.S. tariffs would add $1.1 billion in costs over the period. Stocks briefly extended declines after Trump said he ordered the commissioner of the U.S. Bureau of Labor Statistics, Erika L. McEntarfer, to be fired in the wake of the jobs data. In contrast to the broad declines, Reddit (RDDT.N), opens new tab surged after it reported quarterly results that exceeded Street expectations, boosted by an AI-focused advertising strategy and strong user engagement.
The Independent
an hour ago
- The Independent
Lawyer says he's not been allowed to see 5 immigrants deported by the US to a prison in Eswatini
Five immigrants deported by the United States to Eswatini in a secret deal last month had served their criminal sentences before they were sent to be held in a prison in the African country, a lawyer working on their cases said Friday. The Eswatini lawyer also said the men from Cuba, Jamaica, Laos, Yemen and Vietnam sent to southern Africa under President Donald Trump 's third-country deportation program have been denied access to legal representation while being held in Eswatini's main maximum-security prison. The lawyer, Sibusiso Nhlabatsi, said he hasn't been allowed to see the men and that he filed court papers Thursday against the head of Eswatini's correctional services department and the country's attorney general, demanding access to them. He said he is representing them on behalf of lawyers in the U.S. and was prevented from seeing them by Eswatini prison officials on July 25. It's unlawful for the men, who have been in Eswatini for around two weeks, to be denied access to a lawyer, he added. The Eswatini government has said the men will be held in solitary confinement until they can be deported to their home countries, which could take up to a year. 'They have served their sentences,' Nhlabatsi told The Associated Press. 'If a person has committed a crime and they have served a sentence, why are you then keeping them in a prison?' Nhlabatsi said the men have not been able to communicate with their families or receive visitors since arriving in Eswatini, although prison officials said they were in the process of setting up devices to allow them to speak with their families. He alleged their ongoing detention could have legal implications for Eswatini, a small country bordering South Africa and one of the world's last absolute monarchies, ruled by a king accused of cracking down on dissent. The Trump administration has come under scrutiny for its choice of African countries to strike deportation deals with. It deported eight immigrants described as violent criminals to South Sudan in early July in an operation that was halted by a legal challenge in the U.S. The eight were held for weeks in a converted shipping container at an American military base in nearby Djibouti while the case was decided. A Supreme Court ruling eventually cleared the way for them to be sent to South Sudan. Both South Sudan, which is in danger of tipping into civil war, and Eswatini have poor rights records and governments accused of being repressive. Critics say the deportees, who the administration says were in the U.S. illegally, will likely be denied due process in those countries. The five sent to Eswatini were also described by the U.S. Department of Homeland Security as serious criminals. Their convictions included murder and child rape, the department said in social media posts, calling them 'uniquely barbaric." The department, which did not say if they had completed their sentences, did not immediately respond to a request for comment on Friday. An Eswatini government spokesman also declined to comment on Nhlabatsi's allegations, saying it was now a matter for the courts. Nhlabatsi said the deportees are being held at the Matsapha Correctional Complex near the administrative capital, Mbabane, the same prison said to hold pro-democracy activists on trumped up charges. The government has declined to say where the five men are being held, citing security concerns. Eswatini's statement about the five men ultimately being deported to their home countries appears to contradict claims by the U.S. that their home countries refused to take the men back. Activists in Eswatini have demanded that the details of the agreement with the U.S. be made public but the government has said they are 'classified.' South Sudan has also declined to give details of its agreement to take deportees from the U.S. ___
Reuters
an hour ago
- Reuters
Proposed Canada-US trade deal could still be weeks away, says Ottawa
OTTAWA, Aug 1 (Reuters) - A proposed U.S.-Canada trade deal could still be weeks away, Ottawa's chief negotiator said on Friday, a day after U.S. President Donald Trump imposed higher tariffs on imports from Canada. Trump - who had set an August 1 deadline for an agreement - signed an executive order increasing tariffs on Canadian goods to 35% from 25% on all products not covered by the U.S.-Mexico-Canada trade agreement. Prime Minister Mark Carney insisted on the talks to reset bilateral relations, saying Trump's tariffs have upended decades-old trading and security ties. The negotiations, though, have so far produced little. Although over 90% of Canadian exports enter the United States without duties, the tariffs apply to crucial sectors such as steel, aluminum and automobiles. Federal cabinet minister Dominic LeBlanc, in charge of U.S. trade relations, said Canada had always made clear it would only accept a good deal. "At the end of business yesterday that agreement was not yet in sight ... there remain sectors the Americans are targeting which are essential for the Canadian economy," he told public broadcaster Radio-Canada. "Over the coming weeks we will ... continue talks with the Americans in an attempt to find a deal that would put us in a better position." Separately, LeBlanc told reporters in Washington that he would speak to U.S. Commerce Secretary Howard Lutnick next week and hoped to meet him in August. "The doors aren't closed, the doors are open, the conversations are ongoing," he said. The White House cited what it said was Canada's failure to stop fentanyl smuggling and address U.S. concerns about trade barriers. Washington is also unhappy about Canada's refusal to drop its own countermeasures, which were first imposed by former Prime Minister Justin Trudeau. He resigned in March to be replaced by Carney, who won an April election promising to stand up to Trump. In June, Carney had threatened to ramp up counter tariffs in July unless there was progress on the deal. A statement he issued on Friday did not mention retaliation. Brian Clow, who was in charge of U.S. relations inside Trudeau's office for several years, noted Trump had announced deals with nations that declined to impose counter tariffs. "Unfortunately, Canada stands on its own right now, along with China, because many other countries ... refused to stand up to this President," he said by phone. "So I'm not sure that further retaliation is the way to go." Carney's talk about standing up to Trump cannot hide the divisions between those advocating for a hard line and those who worry about the potential economic damage. Goldy Hyder, president of the Business Council of Canada lobby group, said Canada was struggling at the talks and urged a new approach. "As someone said to me, Canada is playing chess, but there's nobody playing chess with it at the other end," he said. "We've got to make sure that we are thinking through: 'What have we been doing and what do we need to do?'," he told CBC News. "We've got to move with greater urgency, because our own economy is very fragile."
