US Tariffs on African Goods a Wake-Up Call for Faster AfCFTA Implementation

The United States’ recent decision to impose tariffs on a range of African goods has sent shockwaves across the continent, serving as a stark reminder of Africa’s vulnerability to external market shifts.

The move highlights the urgent need for African countries to accelerate the implementation of the African Continental Free Trade Area (AfCFTA), a flagship project aimed at boosting intra-African trade and insulating the continent from external economic shocks.

Launched in 2018 and officially operational since January 1, 2021, the AfCFTA seeks to create a single market for goods and services, covering 55 countries and 1.4 billion people with a combined GDP of over $3.4 trillion.

It aims to eliminate tariffs on 90 percent of goods, reduce barriers to trade in services, and address non-tariff obstacles such as customs delays and complex regulatory frameworks.

Once fully implemented, the AfCFTA is expected to increase intra-African trade by more than 50 percent and lift 30 million people out of extreme poverty, according to the World Bank.

However, despite its potential, progress has been slow. While 54 countries have signed the agreement and 47 have ratified it, actual trade under AfCFTA rules remains limited.

Key protocols on trade in goods, services, and dispute resolution have been agreed upon, yet negotiations on critical areas such as competition policy, intellectual property rights, and investment protections are still ongoing.

The Guided Trade Initiative (GTI), launched in late 2022 to kickstart trade among select countries under AfCFTA terms, has shown promise but covers only a fraction of Africa’s potential trade flows.

Tariffs and non-tariff barriers within African countries have long been a significant obstacle to regional trade.

Intra-African trade accounts for just about 15 percent of the continent’s total trade, compared to 58 percent in Asia and 67 percent in Europe.

High tariff rates, complex customs procedures, and poor transport infrastructure have made it easier for African countries to trade with Europe, Asia, or the United States than with their neighbors.

For instance, tariffs on agricultural products between African nations can be as high as 35 percent, making it costlier to import goods from a neighboring country than from across the ocean.

The AfCFTA is designed to change this. By abolishing tariffs on most goods, simplifying rules of origin, and promoting investment in cross-border infrastructure, the agreement aims to create a more integrated African economy.

In doing so, it would enable African businesses to scale up, create jobs, and increase resilience against external shocks — like the newly introduced US tariffs.

The US move is particularly painful for African countries that have relied heavily on preferential access to the American market under initiatives like the African Growth and Opportunity Act (AGOA).

With tariffs now threatening the competitiveness of African exports such as textiles, agricultural products, and metals, the continent’s overreliance on external partners is being exposed.

Experts argue that this should be a turning point.

Some progress has been made. Countries like Ghana, Rwanda, and Kenya have launched national AfCFTA strategies aimed at aligning domestic policies with the continental framework.

The Pan-African Payment and Settlement System (PAPSS), designed to facilitate payments in local currencies across African borders, was officially launched in 2022, offering a critical tool to reduce transaction costs and ease trade flows.

Still, challenges remain. Protectionism, political instability, and slow harmonisation of standards continue to undermine the spirit of free trade.

Many African industries remain wary of sudden exposure to regional competition, while logistical bottlenecks persist, particularly in landlocked countries.

The recent tariffs by the United States should act as a wake-up call. If African countries can expedite the implementation of the AfCFTA — moving beyond signatures and rhetoric to real, meaningful trade — the continent will be better positioned to withstand external shocks and drive its own economic destiny.

gandae@businessdayafrica.org