Africa mulls continental trade proposal with Trump
And experts have welcomed the move by Africa, seeing it as a first step to an integrated continental approach on Trump's tariffs ahead of the expiry of a 90-day freeze, initially set for July 9, 2025.
The AU says it will present the African Continental Free Trade Area (AfCFTA) agreement to discuss the lowering of tariffs with Trump, as provided for under the World Trade Organisation (WTO) rules. Yet it is not given that the entire AU membership will stay behind the continental plan.
African Union Commission chairperson Mahmoud Ali Youssouf last week asked African countries to speak with one voice. He called for frank engagement between the United States and Africa, noting that trade between the two regions is not helped by the imposition of travel bans on some African countries as well as the imposition of tariffs in violation of WTO rules and other international agreements.'This is a wakeup call for African nations. Yes, we are going to rely on our domestic resources, we are developing policies to mobilise national resources that we cannot accept visa bans,' Mr Youssouf told the US-African Business Summit in Angola.'We cannot accept unfortunate tariffs that have nothing to do with the rules and regulations of the WTO.'
He then followed it up with a crackdown on illegal immigrants and imposed visa bans on African countries, including Somalia, Sudan, Chad, Eritrea, Libya, Congo-Brazzaville and Guinea. Before that, he had cut substantial aid that traditionally came to Africa through the USAid, an agency that has since been retired.
Trump himself plans a US-Africa Summit later in the year to discuss trade and other relations, the first time he would have hosted such a summit launched and continued by his predecessors Barack Obama and Joe Biden.
But he has also planned for a mini summit with leaders from Gabon, Guinea-Bissau, Mauritania, Liberia and Senegal for 'commercial opportunities,' according to a dispatch from the White House.
This move comes at a time China has announced a zero-tariff policy for African countries. Any of the 53 African countries in Africa that has diplomatic ties with Beijing will get duty-free access to Chinese markets once they sign a trade deal.
Trade experts support the AU, arguing that Africa, which trades with the US under the African Growth and Opportunity Act (Agoa), stands a better chance with Trump if it negotiates with one voice, including the renewal of Agoa, which expires in September.'If Africa can confront the US and tell them what China has done, call for renewal of Agoa with clear objectives, this could be a defining moment for Africa. The AU can use the European Union as a template as the African trade volumes with the US is minimal,' said Dr Benson Musila, a political science lecturer at Riara University in Nairobi.'This is a defining moment for Africa, where they can say from now on, we have to negotiate as a unit. The fact that we have the AfCFTA, African countries can use that to tell Trump that whatever we do should not contradict with AfCFTA.' AfCFTA Secretary-General Wamkele Mene, in support of a unified approach, reinforced Africa's integration agenda, highlighting the importance of open regional markets.'The undertaking of AfCFTA is an ambitious one. It reflects a reality: 54 nations, 1.3 billion people, with a $3.4 trillion gross domestic product,' Mene said.'Africa's transformation demands bold action. The AfCFTA is the blueprint. Its success is essential to scale investment, reduce fragmentation, and accelerate industrial development'.
'When it comes to Africa speaking with one voice, Kenya will be part of that conversation,' Mr Kinyanjui said. 'Kenya stands to lose more than other African countries should the US fail to renew Agoa..''We should review the high tariffs on African countries. What is needed is more trade between Africa and the US, not less,' said Dr Akinwumi Adesina, outgoing president of the African Development Bank Group.
As Trump's tariff deadline approaches, South Africa has sought more time to negotiate a trade deal. Pretoria aims to secure a trade deal that would exempt some of its key exports from the tariffs, including autos, auto parts, steel, and aluminium. It has offered to buy liquefied natural gas from the United States.
Responding to the call for deeper engagement, US officials acknowledged Africa's growing economic importance and the need to reset perceptions.'There are business leaders in the US, who need to understand the opportunities that lie in doing business with Africa. Our mission going forward will be to find them—and bring them in,' said Troy Fitrell, Senior State Department Bureau Official.
Fitrell expressed confidence in the case for American investment in the continent, underscoring the durability of its products as well as investments in local human capital.'We are focused on the latest technology and the latest innovations. We invest in our workforces and we provide value over a life cycle,' he added.
© Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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Zawya
5 hours ago
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Kingdom of Lesotho: Staff Concluding Statement of the 2025 Article IV Mission
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Looking forward, increased water royalties from South Africa will further boost revenue, and help offset easing SACU transfers. The main challenge for the authorities is to transform these fiscal surpluses into sustainable and high-quality growth -- now even more urgent in light of recent shocks. Public funds should be saved wisely and spent strategically, with an emphasis on high-return investment projects. More effective use of public funds, alongside structural reforms, should support longer-term private sector-led growth. An International Monetary Fund (IMF) team led by Mr. Andrew Tiffin held meetings in Maseru with the authorities of Lesotho and other counterparts from the public and private sectors and civil society from June 4 to 17, 2025, as part of the 2025 Article IV consultation. Discussions focused on the mix of fiscal and monetary policies to ensure macroeconomic stability and debt sustainability, as well as the structural reforms needed to create jobs, reduce poverty, and facilitate the transition to private-sector-led growth. Context and Outlook IMF staff estimates suggest that real GDP growth picked up modestly in FY24/25 to 2.6 percent, up from 2.0 percent the previous year. In large part, this reflects spillovers from the Lesotho Highlands Water Project (LHWP-II), which has helped offset declining competitiveness in the apparel sector and the impact on exports of lower diamond prices. Headline inflation was 4.0 percent in April, down from a peak of 8.2 percent in January 2024. The gap between CPI inflation in Lesotho and South Africa mainly reflects the larger share of food in Lesotho's CPI basket. Lesotho's fiscal balance registered a sizable surplus in FY24/25. South African Customs Union (SACU) transfers are up by almost 14 percent of GDP compared with FY23/24, and recurrent spending has remained steady as a proportion of GDP, owing to a moratorium on public sector hiring and a reduction in the in-kind social assistance benefits. Capital spending increased but execution remained short of budgeted levels. The net impact has been a fiscal surplus of 9.0 percent of GDP in FY24/25, which helped lift gross international reserves to 6 months of imports; strengthening the peg. With less issuance of domestic debt, clearance of domestic arrears, and repayment of an IMF arrangement under the Rapid Financing Facility, public debt fell to 56.6 percent of GDP in FY24/25, down from 61.5 percent in FY23/24. However, a more uncertain global environment has undermined Lesotho's economic outlook, with growth expected to almost halve to 1.4 percent in FY25/26. 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Until very recently, debt has trended steadily upward, rising sharply during the COVID-19 pandemic. The decline over the past year has been welcome, but the IMF's Debt Sustainability Analysis still suggests that, although the risk of debt distress is 'moderate,' there is little scope to absorb any further shocks. These might easily push debt to a level where the risk of debt distress is high. A medium-term goal of 50 percent of GDP would be appropriate, as it would allow for greater resilience and is consistent with the debt anchor proposed in the fiscal rules. The authorities should therefore scale back new borrowing but might also consider first retiring existing (high cost) debt. In addition, the authorities should clear any remaining or new domestic arrears as soon as possible. Spending Strategically Improved public investment management is needed to increase the quality of capital spending. 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Khaleej Times
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Trump imposes 25% tariffs on allies Japan, South Korea
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