The Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, has said that Africa will be minimally affected by the tariffs recently imposed by the United States of America under President Donald Trump’s trade policy direction.
Okonjo-Iweala disclosed this while addressing Nigerian journalists during the Spring Meetings of the World Bank and International Monetary Fund (IMF) in Washington D.C. on Friday.
According to her, the continent’s trade exposure to the U.S. is relatively small, and this limits the direct economic fallout from the American tariffs.
According to her, only 6.5 per cent of Africa’s exports go to the USA, while 4.4 per cent of its imports come from the U.S., meaning that the impact on the continent would be minimal.
Although the immediate impact of the tariffs may be minimal, the WTO chief expressed concern that Africa’s low level of trade with the U.S. is not ideal and points to deeper structural challenges facing the continent.
“The trade of the continent is very limited with the USA. We have done the analysis, and the impact on the continent as a whole is not significant,” she said.
She used the example of Lesotho, which exports about $200 million worth of textiles to the U.S., to illustrate how Africa’s trade strategy is overly dependent on volatile external markets. According to her, despite these exports, Lesotho continues to struggle due to the contracting U.S. textile market.
She noted that Africa spends 7 billion dollars annually on importing textiles, suggesting that Lesotho should instead focus on selling textiles within African markets.
Need for Intra-Africa Trade and Investment
Okonjo-Iweala urged African governments and policymakers to look inward by strengthening regional and intra-African trade.
She highlighted the importance of the African Continental Free Trade Area (AfCFTA) as a critical tool in achieving this goal.
“We cannot trade more externally, where our share is only 3 per cent of global trade, or internally, where intra-African trade remains at 16 to 20 per cent at best,” she noted.
She also called for increased investment in Africa, pointing out that aid flows are declining, and the continent must build resilience through self-sustained growth.
Tariffs and Least-Developed Countries
In her remarks, Okonjo-Iweala appealed to the U.S. to take into account the effects of its tariff policies on least-developed countries (LDCs), many of which are in Africa. She recommended that the U.S. reassess reciprocal tariff arrangements for these nations to avoid worsening their economic vulnerabilities.
What You Should Know
- The WTO has projected global trade growth of just 3.3% in 2025, a modest recovery from previous years.
- Africa contributes only 3% to global trade and lags significantly in intra-continental trade compared to other regions like Asia and Europe.
- The AfCFTA, launched in 2021, is considered one of Africa’s most ambitious initiatives to boost internal trade and reduce dependence on external partners.
- Textile is one of Africa’s most underutilised sectors with strong potential to drive industrial growth if intra-African value chains are developed.
