The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, has downplayed the perceived impact of the sweeping reciprocal tariffs imposed on African economies by theTrump Administration .
Many economists and analysts fear that the reciprocal tariffs, although currently suspended for a period, would have a catastrophic impact on the African continent, derailing its economic growth.
But WTO is allaying such fears after conducting an assessment of the impact of the tariff on the African continent.
At a press conference in Geneva, Switzerland, the Director-General of the WTO maintained that Africa’s real GDP growth outlook remains broadly stable even if the United States reinstates reciprocal tariffs.
She therefore indicated that the vulnerability and the risk estimated from the tariff on Africa’s economic growth is very modest and insignificant.
“At the aggregate level, Africa’s economic outlook remains broadly stable under current trade policies, with real GDP growth for the continent largely unchanged, even if reciprocal tariffs are reinstated,” she narrated.
In justifying this assessment, the Director-General explained that Africa’s trade exposure to the U.S. is modest, making the continent less vulnerable to sudden shifts in American trade policy.
“Africa’s trade with the U.S. is relatively small,” she stated revealing that only about 6.5% of Africa’s total exports go to the U.S., while just 4.4% of its imports come from there.
“The share of Africa’s exports to the U.S. as a percentage of its total exports to the world is about 6.5%. And the share of Africa’s imports from the U.S. as a share of its total imports is also about 4.4%,” she added
In essence, the bulk of Africa’s trade activities are concentrated elsewhere either within the continent or with Asia and Europe and hence dampening the direct impact of any potential U.S. tariff hikes.
But there is some level of risk for some individual countries despite the very minimal impact on the continental level.
While the aggregate numbers signal relative immunity, Dr. Okonjo-Iweala cautioned that some countries could still suffer disproportionately. Chief among them is Lesotho, a small, landlocked country in Southern Africa whose economy is heavily reliant on textile exports to the U.S. These exports are valued at $240 million annually, representing a whopping 10% of Lesotho’s GDP.
“Some countries like Lesotho are particularly vulnerable due to their high reliance on textile exports to the U.S. market. These exports are about $240 million, or 10% of Lesotho’s GDP,” she indicated.
The WTO boss’s remarks come amid a global atmosphere of rising trade tensions and increased scrutiny over longstanding international trade agreements.
However, Dr. Okonjo-Iweala remains optimistic. With Africa accelerating its own trade integration through the African Continental Free Trade Area (AfCFTA), the continent is gradually reducing its reliance on external markets. She believes that strategic diversification and stronger regional value chains are the long-term solution to mitigating external shocks.
