By Vivian Kai Lokko
The global economy is bracing for fresh shocks as the United States intensifies its protectionist stance. On Saturday, July 12, 2025, Washington announced sweeping new tariffs—30% duties on goods from the European Union and Mexico, effective August 1.
This follows a string of similar measures targeting 23 other countries, including Canada, Brazil, Vietnam, and Japan, with tariffs ranging from 20% to 50% and a prior announcement of 10% for African countries.
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For the EU alone, where one-fifth of exports head to the U.S., the implications are staggering.
While negotiations remain ongoing in hopes of reaching agreements before the August deadline, the uncertainty is already wreaking havoc on global markets. U.S. President Donald Trump’s aggressive trade posture, reignited in April with threats of reciprocal tariffs, has triggered market turbulence, shaken investor confidence, and injected deep uncertainty into corporate planning worldwide.
The sudden and unprecedented nature of these tariff hikes is not only straining diplomatic ties but also fueling fears of price hikes, job losses, and long-term damage to global trade flows. As the world’s economic powerhouses brace for impact, one question looms large for Africa: Will the African Continental Free Trade Area (AfCFTA) be its shield—or its missed opportunity?
AfCFTA is more than a policy agreement—it is Africa’s most ambitious economic integration project to date. Designed to create a unified market for goods and services across the continent, the AfCFTA holds the promise of driving industrialization, job creation, and sustainable economic growth.
Since its trading arm officially launched on January 1, 2021, the initiative has recorded notable milestones, though the journey toward full implementation remains both complex and ongoing. Some of its notable gains include;
* Signature & Ratification: As of December 2022, 54 out of 55 African Union Member States have signed the AfCFTA, with 47 having ratified the agreement. Eritrea remains the only country yet to sign.
* Rules of Origin: Roughly 92.3% of tariff lines have concluded negotiations on Rules of Origin—key to determining which goods qualify for preferential trade under AfCFTA.
* Guided Trade Initiative (GTI): Introduced in October 2022, the GTI facilitates the free flow of goods between countries and has grown from 7 to 39 participating nations, making the AfCFTA operational in real terms.
* Trade Growth: According to the African Trade Report 2025 by the African Export-Import Bank (Afreximbank), intra-African trade grew by 12.4% in 2024 to reach US$220.3 billion-marking a strong rebound from the 5.9% contraction recorded in 2023, underscoring the agreement’s resilience amid global headwinds.
Despite these advances, the AfCFTA now faces its greatest test yet: navigating the turbulent waters of escalating global trade wars.
The announcement by the United States to impose a blanket 10% tariff on imports from some African countries, including Ghana, in April 2025, sent shockwaves across the continent, with others like South Africa and Lesotho to face additional hikes of fifty percent.
For Ghana the hikes could endanger key sectors like cocoa, textiles, and agriculture.
This does not only threaten export earnings but also undermines industrial competitiveness.
The implications run deeper.
Most African nations rely heavily on exports of raw materials. Any shift in global demand or price volatility could destabilize their economies.
Rising trade tensions introduce uncertainties that deter foreign investment—particularly in emerging markets like Africa.
African manufacturers depend on imported machinery and inputs, and new tariffs could raise production costs, squeeze margins, and hurt consumer purchasing power.
In short, the trade war exposes Africa’s vulnerability to external shocks and makes a compelling case for deepening regional integration under the AfCFTA.
Why AfCFTA Is More Vital Than Ever
Amid protectionist pressures, AfCFTA offers Africa a strategic shield and a powerful springboard. By lowering tariffs internally and harmonizing trade rules, it enhances the continent’s economic sovereignty and buffers against global volatility.
Gradual removal of internal trade duties will also make African goods more competitive across borders while streamlining regulations, reducing bureaucracy, and addressing customs inefficiencies will cut trade costs.
Despite its strong momentum, the AfCFTA is not without serious challenges — many of which are rooted in political inertia and structural deficiencies.
As Mavis Owusu-Gyamfi, CEO of the African Centre for Economic Transformation (ACET), underscored at the 2025 Citi Business Forum, the core obstacle is not a lack of financial resources but a lack of political will.
“We sign the agreement,” she said, “but when it comes to implementation, we falter.”
Across the continent, weak logistics networks, underdeveloped transport infrastructure, and inconsistent trade policies continue to impede the seamless flow of goods. The ambition to harmonize rules across 54 diverse economies is a monumental task, one slowed by persistent customs inefficiencies, bureaucratic red tape, and administrative delays.
Ongoing regional conflicts and governance instability further disrupt trade corridors, undermine investor confidence, and weaken the trust needed for deep continental integration.
Yet within this turbulent landscape lies a window of opportunity. The global tariff war, while disruptive, offers Africa a chance to rethink, reposition, and rise.
Opportunities Amid Global Disruption
AfCFTA offers Africa a rare and powerful opportunity—not just to survive, but to strategically thrive.
Africa’s growing strategic relevance in global geopolitics is unmistakable, as major powers like India, China, and Russia intensify their engagement across the continent.
Africa’s trade with China has surged to a record high of US$134 billion in the first five months of 2025 while that of India was US$97.85 billion in 2022/23.
India’s Prime Minister Narendra Modi, during his recent visit to Ghana on July 3, 2025, underscored Africa’s centrality in shaping the Global South and reaffirmed India’s deepening development and trade ties.
India now ranks as Ghana’s fourth-largest import source, with trade volumes hitting nearly $3 billion in 2023/24.
Similarly, China—Ghana’s top import partner with GHC 33.9 billion in imports in 2023—has stepped up its presence, exemplified by the launch of the China-Ghana Mining Association. These developments signal a critical window for Africa to assert itself through AfCFTA.
By presenting a unified front, AfCFTA enables Africa to speak with one voice in global trade negotiations, increasing its leverage to demand fairer terms and forge more strategic partnerships. The continent’s vast market of over 1.3 billion people presents businesses with immense potential to scale beyond national borders, creating new economic frontiers within Africa itself.
As multinational corporations seek safer, diversified supply chain destinations, Africa’s emerging integration positions it as an attractive alternative for foreign investment. This shift could catalyze the revitalization of local industries, moving the continent away from dependency on raw commodity exports and toward value-added manufacturing and industrial growth.
Moreover, a strong internal market reduces Africa’s vulnerability to external shocks, insulating its economies from the fallout of geopolitical tensions. In a world divided by trade disputes, Africa’s neutral stance offers a unique diplomatic edge, providing an opening to negotiate better infrastructure and development deals from rival global powers.
As Ghana’s former Trade Minister Dr. Ekwow Spio-Garbrah recently noted, “There’s a collective objective we’ve had for 34 years that remains unfulfilled. A united Africa is our best chance at economic sovereignty.” AfCFTA, if fully realized, could be that long-awaited breakthrough.
The Road Ahead
AfCFTA is not just a response to external threats—it is Africa’s master strategy for long-term prosperity. As the world turns inward, Africa must turn to itself. By accelerating the implementation of AfCFTA, building trade infrastructure, and nurturing political commitment, Africa can rise not in spite of the global trade war—but because of it.
In a world of uncertainty, AfCFTA remains Africa’s clearest path to economic resilience and self-determined growth.
Source: Citinews
