The Bank for International Settlements published a BIS Bulletin assessing how shifts in global trade policy could affect African economies and where the region’s growth opportunities lie. It concludes that Africa’s direct exposure to prospective new US tariffs is relatively limited, but that indirect effects from weaker global demand and turbulence in global financial conditions could be larger, and points to regional trade integration and financial development as practical levers to strengthen resilience and lift growth. The bulletin notes that a 2 April tariff announcement implies around 10 African countries could face tariff rates above 20%, although the scale, implementation timeline and legal status remain unclear, and exemptions for selected goods such as energy products and critical minerals could materially reduce the effective tariff burden. It also highlights Africa’s relatively small footprint in global goods trade at about 3%, applied tariffs around 8% (above the rest-of-world median), and a global trend towards net protectionism driven by non-tariff tools, with Africa less active overall but with some non-tariff barriers introduced following food and energy shocks. Against this backdrop, it argues that the African Continental Free Trade Area could boost intra-African trade and diversification, but identifies weak road transport infrastructure and distance as major barriers to intraregional trade, alongside high export concentration and limited manufacturing capacity; it also reports that foreign direct investment inflows rose 86% in 2024 to USD 95 billion while project finance deals fell 13%. Longer-term opportunities are framed around a growing working-age population, resource endowments linked to the energy transition and technology supply chains, and digital payments and payment-system development to support financial integration and supply-chain financing.
Bank for International Settlements 2025-07-18
Bank for International Settlements bulletin finds Africa’s direct exposure to new US tariffs limited and flags AfCFTA, infrastructure and financial integration as growth priorities
The Bank for International Settlements' BIS Bulletin analyzes global trade policy shifts' impact on African economies, noting limited direct exposure to new US tariffs but significant indirect effects from global demand changes. It emphasizes regional trade integration and financial development for resilience and growth, highlighting the African Continental Free Trade Area's potential despite barriers like weak infrastructure and high export concentration. Opportunities lie in Africa's growing working-age population, resource endowments, and digital payment systems.