This article was written with support for Auda Nepad
This year, we celebrate Africa Day in the midst of a global geopolitical landscape that is changing in uncertain and surprising ways. While rising protectionism disrupts access to key products in our country and creates global trade tensions, international development architectures struggle to provide solutions tailored to the scale and complexity of the challenges of the continent. This important moment forces us to reflect on Africa's current global economic status and its collective strength and resilience.
The annual commemoration of Africa Day serves as a powerful reminder of the unwavering commitment to shaping the continent's unity, potential and its own economic and developmental destiny despite the crisis. Among this salient challenge is an unprecedented opportunity to redefine Africa's role in the global economy. It is ripe for African countries to seize this moment and shape their economic destiny with purpose and foresight.
Crisis: Protectionism and its sacrifice
The US's recent decision to impose tariffs on imports from several African countries, including more than 40% on imports from Lesotho, Madagascar and Mauritius, has sent shockwaves throughout the continent. These measures effectively negate the tariff exemptions previously granted under the African Growth and Opportunity Act (AGOA), a trade law that provides eligible African countries with tax-free access to the US market. Agoa is an important lifeline for many African economies, boosting exports, promoting economic growth, and new tariffs threaten to undermine these profits.
In 2024, AGOA supported exports totaled around $8.4 billion. These exports accounted for only 1.1% of the total exports of participating countries, while some countries, such as Lesotho, account for 17% of exports, with Madagascar (7.2%) and Nigeria (6.2%) relying heavily on the trading scheme. Recent tariff impositions have shown troubling changes that could reverse progress made over the last 20 years under this trade agreement, putting the region's economic stability and growth at stake.
Beyond the direct impact, the broader impact of protectionism and policy uncertainty on the Formal Development Assistance (ODA), investment flows, and the overall global economy is even more surprising. Global growth is projected to decline to 2.8% in 2025 and 3% in 2026. The 2025 sub-Saharan Africa growth forecast also witnessed a downward revision of 0.4 percentage points (IMF Regional Economic Outlook 2025).
Commodity prices, particularly crude oil, are set to drop by about 12% as global growth reduces demand. Between April 2 and April 8, Brent crude prices went just over $12 per barrel. This is the 11th four-day price performance since 1990. On the continent, these developments have increased reduced export revenue, reduced fiscal contracts, financial contracts, stricter financing conditions, and ultimate debt vulnerability.
Currently, 24 African countries are at high risk of overall debt difficulties or overall debt difficulties. Africa's annual trade deficit expanded 41% in 2023 to $66.6 billion, according to Afreximbank (AFDB). This bleeding in foreign reserves forces the state to borrow money with coins, deepening the vulnerability of debt. Furthermore, the continent's dependence on exporting raw materials, such as raw coffee, which accounts for 80% of Ethiopia's exports, and raw coffee, which accounts for important minerals like cobalt, accounts for around 60% of the Democratic Republic of Congo. This dependency often leads to currency devaluation and increased inflation, halting economic progress and amplifying poverty across the region.
AFCFTA: The Road to Resilience
Amidst these headwinds, Africa's Continental Free Trade Area (AFCFTA) has emerged as the continent's most powerful tool for self-reliance. Intra-African trade suffers from just 15-18% of total trade (less than 60% in Asia and less than 70% in Europe), but the composition reveals potential for undeveloped. According to the Economic Commission on Africa (UNECA), 45% of intra-African trade accounts for 45% of intra-African trade, more than twice the 20% stake in exports to other parts of the world.
Countries such as South Africa, Egypt and Morocco are already leading the way, with over 50% of manufactured goods aimed at 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, continental manufacturing output is growing at an average annual rate of around 5%, indicating a transition to increasing local self-sufficiency. The lesson is clear. Regional integration is not just an ideal, it is an economic order that can unlock sustainable growth and reduce vulnerability to global shocks.
Turning threats into opportunities
The US-China trade war provides warning stories and continental blueprints. During the 2018 trade war, countries like Vietnam and Mexico exploited the confusion by positioning themselves as alternative manufacturing hubs. Africa can replicate this success with its vast labor force and the expansion of its consumer market, but only if it acts quickly.
Industrial corridors such as the Lekki Free Trade Zone in Nigeria and the Economic Zone in Ethiopia are important to attract businesses refuge in protectionism. These zones need to be expanded with a focus on value-added production. Africa already supplies 30% of the world's important minerals, including cobalt and lithium. But it captures only a small share of their ultimate value.
The joint Africa-US beneficiary agreement could change that. Handling resources locally creates jobs, builds industries and maintains wealth within the continent. The natural benefits of Africa can turn threats and uncertainties into growth opportunities if they turn into strategic assets. Time is essential. Prompt can shape the future of Africa's industry.
Policy lever for change
To capitalize on this momentum, the African government must implement four key strategies as key drivers for change with the establishment of the African Union Development Fund (AUDF), led by the African Union Development Agency.
Africa has been at a critical turning point in the development financing situation as leaders have recently come together in Luanda, Angola to promote the establishment of the African Union Development Fund. Chaired by President Joan Manuel Goncalves Lurenzo, the high-level meeting attracted key stakeholders, including the African Union Commission (AUC), Order Pad and the alliance of the Multilateral Financial Institutions of Africa (AAMFI).
Based on decision 818 of the Head of State's AU parliament, AUDF is set to close key financial gaps, ensuring that Africa does not rely solely on external sources to drive key sectors such as infrastructure, energy, agriculture, health and industrialization. The meeting reinforced the reality of urgentness. Africa must control its own developmental trajectory through sustainable sovereign financing.
What sets AUDF apart is its collaborative nature. It is designed not as a rival to existing fundraising institutions, but as a unified force that amplifies them. It's not about competition, it's connectivity, and ensures that the political vision coincides with capital deployment and technical expertise. AUDF aims to unlock large-scale, results-driven developments by integrating African financial architecture into a cohesive platform. Its supporters argue that true economic sovereignty lies not only in policy decisions but also in its ability to mobilize its own resources for long-term growth.
First, mobilizing domestic resources is not negotiable. Multinational corporations' tax exemptions estimate annual revenue losses across Africa. You can plug in these leaks by digitizing your tax system, deploying AI to detect fraud. Rwanda's successful e-filing system recovered more than $200 million in unpaid tax within its first year. Similarly, Egypt has significantly improved its tax revenue collection by modernizing its customs and tax systems, adding nearly $10 billion a year to its national funding.
Second, corruption must be addressed head-on. Publicizing public institution performance rankings and accountability scores, as Kenya did with procurement authorities, can make you feel embarrassed about the delay reform. Ghana's “asset declaration” system, which publicly documents the assets of civil servants, further strengthened integrity. Enlarging such measures across Africa will help raise investor confidence and improve service delivery.
Third, regional procurement needs to be expanded and standardized. During the pandemic, Africa pooled vaccine demand and reduced costs. The same approach can be applied to essentials such as fertilizers and pharmaceuticals.
Finally, trade policy must first serve Africa. According to the AFDB, the continent spends $50 billion a year importing food that could be produced. Redirecting this demand inward will protect the economy from global shocks. Countries such as Ethiopia, Rwanda and Senegal have already made progress in rice self-sufficiency through targeted investments, indicating that regional food security is achievable. Redirecting inward spending will strengthen resilience, create millions of jobs, and reduce reliance on the unstable global markets in Africa.
The road ahead
The world is undergoing deep change and Africa is at a crossroads. They either remain on the sidelines or boldly pave their own path. AFCFTA provides a powerful framework, but implementation is slow. Barriers of non-interest, inadequate infrastructure, and bureaucratic red tapes continue to stifle progress.
As I often say, on every occasion, every kilometre of Railway Africa should use African steel. All school uniforms should be sewn in African factories. “This vision is not protectionism, it is pragmatism and strategic independence.
Half the measurement time is over as Ago's future is under threat. Africa's economic sovereignty depends on its ability to deepen regional integration, promote innovation and secure seats at the global decision-making table.
The world is retreating. This is the moment Africa will guide, unite, and build a resilient, self-sufficient continent. The path to advance is clear. Africa must act now. This is when it rises.
