Jeremy Awori, chief executive officer of Ecobank, stated that African countries need to trade within the continent more actively in response to the proposed US tariffs during the tenure of Donald Trump.
Economically, the region is not so much concerned; in 2023, the US was fourth in the list of imports sub-Saharan Africa had, after China, the UAE, and India, at $29 billion.
During the Bloomberg TV interview, Awori mentioned that the replacement of AGOA would essentially be Trump’s tariffs. The highly criticized piece of trade legislation is believed to have destroyed more jobs in America than it created. The legislation is estimated to have some impact on Africa’s trading partners. Although the US is not Africa’s main trading partner, he did make a statement that some indirect influences from China, for example, not importing African exports, might emerge.
With regards to what was previously discussed, tariffs have a very large difference, from 10% for countries such as Kenya and Benin to a world-steep 50% for Lesotho. Moreover, he pointed out that these changes make it essential to put on the fast track the implementation of the African Continental Free Trade Area (AfCFTA) established in 2022. Also advocated for solving non-tariff issues like daunting, complex visa arrangements and infrastructure voids hindering landlocked nations.
Foremost, Nigeria was quick to point out that non-oil goods like agricultural products are being traded under these harsh AGOA rules, making it harder for countries to export.
An increase in taxation by 10% on main categories could further escalate the decline of Nigeria’s standing in the US market. Ecobank research also cautioned that Trump’s prior withdrawal of aid to Africa endangers pushing an additional six million people into dire poverty.
Intra-African trade increased to $192 billion in 2023, although this still constitutes a mere 15% of trade on the continent. Awori added that Africa could transform raw materials into competitive products through value addition within borders, enabling the continent to access $560 billion in exports (as per the estimates of the World Bank), create endless employment opportunities, and aid national economic resilience if the AfCFTA is fully operationalized.
“Africa needs to expedite the facilitation of cross-border trade within the continent, utilize its markets, and protect the economic interests of its people,” signified his push toward a unified trade policy framework.
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