Geneva — The head of the World Trade Organization says a temporary tariff pause by the United States mitigates current trade contraction, but substantial downside risks persist, which can heavily impact Africa.
WTO Director-General Ngozi Okonjo-Iweala released the Global Trade Outlook at the WTO on April 16, warning of global dangers with the U.S. and China “decoupling” their economies.
She said at a press conference that the world’s merchandise trade volume will likely fall by 0.2 percent in 2025 under current conditions.
North America’s decline is expected to be particularly steep, and its exports are forecasted to drop by 12.6 percent, while Ngozi noted that some of Africa’s poorest countries, such as Lesotho, will be hard hit.
“A decoupling between the two major economies (the U.S. and China) could have far-reaching consequences if it were to contribute to a broader fragmentation of the global economy along geopolitical lines into two isolated blocks,” said Ngozi.
She said imposing “reciprocal” tariffs could lead to broader policy uncertainty, and these could trigger a sharper decline of 1.5 percent in global goods trade and hurt export-oriented least-developed countries (LDCs).
‘This is because Africa’s trade with the U.S. is relatively small’
“Exempting LDCs from all tariff increases would raise their exports, support their growth, and, in essence, help to create new markets,” said Ngozi.
She said that Africa’s economic outlook is broadly stable under current trade policies, with real GDP growth for the continent essentially unchanged, even if reciprocal tariffs are reinstated.
“This is because Africa’s trade with the U.S. is relatively small. The share of Africa’s exports to the U.S., as a percentage of its total exports to the world, is about 6.5 percent.”
Get the latest in African news delivered straight to your inbox
By submitting above, you agree to our privacy policy.
Almost finished…
We need to confirm your email address.
To complete the process, please follow the instructions in the email we just sent you.
There was a problem processing your submission. Please try again later.
Ngozi said the share of Africa’s imports from the U.S. of its total imports is around 4.4 percent, with differences across countries.
“Some countries, like Lesotho, are particularly vulnerable due to their high reliance on textile exports to the U.S. market,” she observed.
Such exports are about $240 million or 10 percent of Lesotho’s. GDP,
“Cote d’Ivoire is another example. The largest cocoa producer in the world has about $800 million in exports to the U.S.,” said Ngozi.
Vulnerable to smuggling
U.S. tariffs can make Cote d’Ivoire’s cocoa vulnerable to smuggling to neighbouring Ghana, an “unintended consequence.”
“By 2050, 25 percent of the world’s population will be in Africa, whilst the present trade situation is being sorted out,” Ngozi said.
The Nigeria-born WTO chief pleaded for possible tariff exemptions for most of Africa since this is where most least developed countries are found.
Africa has 32 of the 44 least developed countries (LDCs), and Ngozi said that the continent needs “more self-reliance.”
“The external environment has changed and is more adverse. Aid is drying up, and trade is becoming more politicized,” said the WTO chief.
“So there needs to be a focus on raising domestic resources, attracting domestic regional and foreign investments on faster and greater trade integration within the continent, such that intra-Africa trade is lifted well beyond the current 16 percent,” said Ngozi.
She noted that Africa imports an estimated $7 billion of textiles, and Lesotho’s $240 million could be absorbed within Africa.
AllAfrica publishes around 500 reports a day from more than 110 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.
AllAfrica is a voice of, by and about Africa – aggregating, producing and distributing 500 news and information items daily from over 110 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC.
Get the latest in African news delivered straight to your inbox
By submitting above, you agree to our privacy policy.
Almost finished…
We need to confirm your email address.
To complete the process, please follow the instructions in the email we just sent you.
There was a problem processing your submission. Please try again later.
source
