Opinion
Amid Trade Wars, Fractured Trade: Africa’s Future Lies in the AfCFTA
By Danilo Desiderio
As global trade grows increasingly fragmented, Africa stands at a crossroads. According to UNCTAD, average tariffs imposed by major economies – including the United States – have skyrocketed from just 2.8 percent to over 20 percent by 2025.
This dramatic surge in protectionism isn’t just reshaping supply chains; it’s redefining the rules of economic engagement for developing nations, with profound consequences for Africa.
When powerful economies erect tariff walls, the ripple effects are swift and severe. Multinational corporations respond by reshoring production, relocating closer to key consumer markets, or pivoting to jurisdictions with preferential trade access.
Mexico, for instance, saw a flood of Chinese manufacturing investment in 2024 as firms rerouted supply chains to bypass U.S.–China trade barriers – leveraging the USMCA to maintain access to North American markets.
But while some emerging economies capitalize on this realignment, others – particularly smaller, commodity-dependent nations – are left exposed. Heightened trade uncertainty inflates risk premiums, deters long-term foreign direct investment (FDI), and depresses demand for raw materials when industrial activity slows in advanced economies.
For Africa, where many economies remain tethered to volatile commodity exports, the stakes couldn’t be higher.
Historically, steep tariffs on African exports – be it steel, textiles, or agricultural goods – have stifled industrial diversification and reinforced dependency on raw material sales. The African Union has repeatedly warned that rising global protectionism threatens to undermine the very foundation of the African Continental Free Trade Area (AfCFTA): its promise to catalyze inclusive growth through trade-led investment.
AfCFTA: Not a Retreat, but a Launchpad
The AfCFTA, which aims to eliminate 90 percent of intra-African tariffs and harmonize trade regulations across 54 nations, is often framed as a shield against external shocks. And rightly so.
By deepening regional integration, it can buffer African economies from the volatility of a shrinking global trade environment and stimulate demand within the continent’s own US$3.4 trillion consumer market.
Yet the AfCFTA should not be misconstrued as a substitute for global engagement. Africa’s long-term prosperity still hinges on deeper integration into global value chains (GVCs) – particularly in manufacturing and high-value sectors.
As Park et al., have demonstrated, participation in GVCs anchored by firms from advanced economies remains the most effective pathway for developing-country enterprises to achieve industrial maturity, technological upgrading, and systemic competitiveness.
GVC integration delivers three transformative benefits:
- Technological Learning and Knowledge Spillovers: African firms gain direct exposure to cutting-edge production methods, digital tools, and modern management practices.
- Foreign Direct Investment: GVC-linked multinationals bring not just capital, but long-term commitments, supplier networks, and market access.
- Job Creation and Economic Multipliers: From factories to logistics hubs, GVC participation fuels employment and stimulates broader economic activity.
But rising tariffs are erecting new barriers. Higher trade costs, regulatory uncertainty, and shrinking market access make it harder for African producers to break into – and climb – global supply chains.
In this context, the AfCFTA must serve not as an inward-looking fallback, but as a strategic complement to global integration – a platform that enhances Africa’s collective competitiveness and amplifies its bargaining power on the world stage.
Geopolitics and the “Friendshoring” Challenge
Tariffs today are more than economic tools – they are instruments of geopolitical strategy. The rise of “friendshoring” reflects a new reality: supply chains are increasingly aligned along political and security lines.
Multinationals and governments now prioritize investments in countries deemed “trusted partners,” sidelining those outside these alliances.
For Africa, this trend is a wake-up call. Without a credible, unified regional bloc, individual nations risk being excluded from the next generation of resilient, nearshored supply networks.
The AfCFTA offers a powerful counterweight – transforming fragmented national markets into a single, investable destination capable of attracting capital even amid global turbulence.
A Dual Strategy for Africa’s Future
The danger is systemic. As protectionism chokes global growth, debt-laden developing economies face compounding vulnerabilities.
Africa, seeking to industrialize and diversify precisely when global doors are closing, cannot afford to wait.
The path forward demands a dual strategy:
- Internally, accelerate AfCFTA implementation by investing in cross-border infrastructure, harmonizing standards, and building regional logistics corridors.
- Externally, pursue outward-oriented policies that position African firms as reliable, competitive links in global value chains – through trade diplomacy, investment promotion, and skills development.
The AfCFTA is more than a trade agreement. It is Africa’s strategic response to a fractured world order – a mechanism to reduce vulnerability, unlock regional demand, and project a unified voice in global negotiations.
If the continent seizes this moment with ambition and coherence, it won’t just weather the storm of protectionism. It will emerge as a hub of resilient, competitive, and inclusive value chains – ready for the global economy of tomorrow.
Danilo Desiderio serves as the CEO of Desiderio Consultants Ltd in Nairobi, Kenya, specializing in African customs, trade, and transport policies. He is a customs and trade expert at the World Bank and a senior associate to the Horn Economic and Social Policy Institute (HESPI).
