Africa's answer to tariff wars is strengthening intra-regional trade

US President Donald Trump's protectionist tariffs have impacted trade and industrialisation across the globe. [AFP] Africa stands at a critical crossroads. Despite holding enormous economic potential, the continent faces mounting external pressures, including the latest wave of protectionist tariffs from the United States that threaten to derail fragile gains in trade and industrialisation. The recent move by the US government to impose steep tariffs on African exports should serve as a wake-up call for the continent. As global markets become increasingly protectionist, Africa must urgently strengthen its internal trading mechanisms. This is where homegrown solutions such as the Trans-Africa Bond Alliance (TABA) and the African Continental Free Trade Area (AfCFTA) offer a critical lifeline. According to the United Nations Conference on Trade and Development (UNCTAD) report released in February 2025, if fully implemented, AfCFTA could boost intra-African trade by 53 per cent, lift 50 million people out of poverty, and create 14 million new jobs. However, Africa's ability to achieve these gains depends on dismantling both tariff and non-tariff barriers that continue to suffocate commerce. Currently, intra-African trade accounts for only 16 per cent of the continent's total trade volume which is starkly lower than Europe's 67 per cent and Asia's 60 per cent. Poor infrastructure, fragmented customs processes, and prohibitively high tariffs, averaging eight per cent between African nations compared to just 1.2 per cent between developed countries continue to hinder progress. Furthermore, the continent's 110 borders and 16 landlocked countries exacerbate logistical challenges, forcing traders to secure multiple transit and customs bonds, inflating costs, and creating costly delays. The African Development Bank estimates the continent's trade finance gap has widened to $120 billion (Sh15.6 trillion), disproportionately impacting small and medium-sized enterprises (SMEs) and marginalising youth and women-led businesses from regional supply chains. A transformative initiative jointly launched by Afreximbank and ZEP-RE (PTA Reinsurance Company) launched TABA that introduced a unified transit bond system across Africa's 55 nations, allowing goods to move from Cape Town to Cairo under a single bond. By replacing the fragmented, border-by-border bond system with a streamlined, continent-wide guarantee, TABA will sharply reduce transport costs, de-risk cross-border trade, and catalyze investment. Beyond just efficiency, TABA will help African economies absorb external shocks such as the US tariffs. By strengthening internal markets, enabling faster and cheaper goods movement, and lowering reliance on distant markets, Africa can build a resilient, self-reinforcing economic ecosystem. Regional economic integration is no longer optional; it is a shield against global volatility. Historical comparisons offer important lessons. When the US imposed steel and aluminum tariffs in 2018, studies found that American manufacturing output fell in sectors heavily reliant on imports, despite intended protections. Retaliatory tariffs from affected countries further depressed global trade volumes. Similarly, the Smoot-Hawley Tariff Act of the 1930s deepened the Great Depression by triggering a collapse in international trade. For Africa, the danger is real. Protectionism in key markets can significantly reduce export opportunities, suppress commodity prices, and diminish investor confidence. Without urgent action, African nations risk becoming collateral damage in global trade wars. African businesses The combined power of AfCFTA and TABA offers a path forward. While AfCFTA breaks down policy barriers to free trade, TABA provides the financial and operational backbone necessary for goods to move seamlessly across the continent. Together, they will enable African businesses to scale regionally, diversify markets, and unlock new value chains in manufacturing, agriculture, services, and digital economies. Moreover, the impact will not be confined within Africa's borders. A stronger, internally integrated Africa would wield greater bargaining power in international trade negotiations, reduce vulnerability to external shocks, and position itself as a vital growth pole for the global economy. As the world turns inward, Africa must turn toward itself to building stronger regional ties, investing in shared infrastructure, and championing African solutions for African challenges. TABA and AfCFTA are not just policy innovations; they are instruments of resilience and empowerment. For businesses and governments alike, the message is clear: the time to act is now. Accelerating AfCFTA commitments, and investing in trade-enabling infrastructure must become urgent national and regional priorities and by supporting the expansion and implementation of TABA. Africa's economic future depends not on the openness of distant markets, but on the strength and unity of its own. - The writer is a marketing and business consultant

Africa's answer to tariff wars is strengthening intra-regional trade

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Africa's answer to tariff wars is strengthening intra-regional trade

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