Africa is a continent rich in resources and human potential, but it has long been at the mercy of global economic winds. Our economies are intertwined with the rest of the world in ways that often leave us exposed and vulnerable.
Recent years have accentuated this fragility. The Russia-Ukraine conflict disrupted food supplies across the continent, the US/Israel-Iran war have sent oil prices soaring, hitting several countries that heavily depend on oil imports, escalating food prices, broader inflation, currency stability and the cost of living.
It is time we confront the stark reality, as our heavy reliance on external markets for both exports and imports makes Africa susceptible to shocks originating far beyond its borders. When crises hit these markets, the ripple effects are immediate and devastating.
Shielding Africa requires a bold step towards self-reliance through intra-continental trade, industrialisation, agricultural transformation and infrastructure investment. Without this, we risk perpetual instability in an increasingly unpredictable world.
Limited intra-African trade
Africa’s vulnerability primarily emanates from our limited intra-African trade, which accounts for just 14% of the continent’s total trade volume. This is dwarfed by regions like the European Union and Asia, where intra-regional trade exceeds 60 percent and 53% respectively. Instead, Africa’s exports are predominantly directed outward: over 40% to Europe, 20% to Asia, and significant portions to the Middle East.
For instance, the 2008 global financial crisis slashed demand for Kenyan and Ethiopian horticultural exports by up to 30 percent, leading to job losses and reduced foreign exchange earnings. Similarly, Nigeria’s economy, one of the largest on the continent, has been battered by oil market volatility.
The risks aren’t limited to exports; our import dependencies amplify the pain. The Russia-Ukraine war, which began in 2022, exposed Africa’s heavy reliance on wheat imports from these two nations. Despite the continent’s arable land being more than that of Russia, Ukraine, France and Spain combined, Africa heavily depends on imports of wheat and other cereals crucial for food security.
Benin and Somalia obtained all their wheat from Ukrain and /or Russia, and Egypt depended on the two countries for over 80 percent of its wheat imports. Countries like Egypt, Tunisia, and several in East Africa faced acute food shortages, with wheat prices surging by 50 percent in some markets, exacerbating inflation and social unrest.
Meddle East crisis
The Middle East crisis has led to disruptions in the Straits of Hormuz, a chokepoint for global oil flows, driving up transportation and food prices. The IMF warns that Africa’s economic recovery registered in 2025 is under pressure due to the war. The fund slashed its growth projection for Africa by 0.3% down to 4.2% and expects median inflation to rise to 5% from 3.4% in 2025.
So, how do we shield ourselves from the shocks? Promoting intra-African trade is a logical starting point, bolstered by the African Continental Free Trade Area (AfCFTA), which could boost intra-continental trade by 50% through the elimination of import duties and by up to 100 percent if non-tariff barriers are also addressed, according to the United Nations Economic Commission for Africa (UNECA)s.
Yet, we must be realistic: with most African economies centered on primary commodities like minerals, oil, and raw agricultural products, the immediate potential for mutual trade is limited. What are we trading? Cocoa from Côte d’Ivoire to South Africa’s chocolate factories? Unlikely without deeper integration. The real opportunity lies in diversifying beyond raw exports.
Industrialisation
This brings us to industrialisation, which is a cornerstone for resilience.
African countries must invest in producing essential industrial goods that their neighbours demand, creating value chains within the continent. According to Professor Alemayehu Geda, a prominent macroeconomist, developing industrial corridors, manufacturing hubs linking different parts of Africa, could transform raw materials into finished products. This will enhance the complementarity of trade in Africa, allowing countries to meet the import demands of their trading partners.
According to the World Bank, over 40 percent of African manufacturing firms are already integrated to the global value chain, suggesting that the sector will serve as the critical driver of trade integration. Industrialisation has several economic benefits besides fostering intra-Africa trade. Manufacturing employment in Africa has increased by 148 percent between 1990 and 2018, with further growth having a significant potential in employment creation on the continent.
Industrial corridors
Industrial corridors, where sub regions in Africa specialise in manufacturing specific types of industrial goods based on their dynamic comparative advantages, are likely to fuel trade integration. One can think of different industrial corridors specialising in manufacturing sectors with varying degree of technology intensity.
While some corridors may focus on hi-tech manufacturing such as aerospace, pharmaceuticals, electronics, others may build medium technology manufacturing plants to produce motor vehicles petroleum products, basic metals and similar products that require medium level of R&D investment.
Countries with a nascent manufacturing sector can take advantage of low-tech industries such as food, beverages, textile, leather, wood products and furniture. The corridors can be guided by the industrial development index developed by the African Development Bank where African economies are classified into five groups as most industrialised, upper middle, middle, lower middle and least industrialised. The top industrialised countries such as South Africa, Egypt, Tunisia have the capability to expand high tech industries while the least industrialised such as Cameroon, Madagascar, Mozambique can build low tech industries.
The World Economic Forum’s Future of Growth Report 2024 estimates that targeted industrialisation could add $56-billion to Africa’s GDP by 2030, reducing dependence on volatile global markets. Imagine South African steel feeding Kenyan factories, or Ethiopian textiles supplying West African apparel industries. This is not wishful thinking; it is achievable with policy incentives like tax breaks and skills training, as seen in Rwanda’s burgeoning tech sector.
Transforming Africa’s agriculture
Equally critical is transforming Africa’s agriculture to generate reliable intra-African surpluses. According to the African Development Bank, the continent holds about 65% of the world’s uncultivated arable land, yet it remains a net food importer, spending approximately $50 billion annually on food imports. This paradox reflects structural inefficiencies, including low yields, limited irrigation, weak storage and transport systems, and high exposure to climate shocks, rather than a lack of productive potential.
Crop yields across much of Sub-Saharan Africa remain significantly below global averages. For example, cereal yields average roughly 1.5–2 tons per hectare compared to over four tons globally.
According to the Food and Agriculture Organisation (FAO), only about 6% of cultivated land is irrigated, versus over 40% in Asia. These constraints contribute to persistent regional imbalances: surplus-producing countries such as South Africa and parts of East Africa often coexist with chronic deficits in the Sahel and Horn of Africa.
Intra-African agricultural trade
Expanding intra-African agricultural trade is widely seen as one of the most effective levers for resilience. Productivity-enhancing investments in irrigation, mechanisation, improved seed systems, and climate-resilient practices could raise output significantly while enabling more consistent cross-border flows. These improvements are especially important in light of global supply disruptions which exposed Africa’s dependence on imported wheat, maize, and fertilizers.
None of this happens without robust infrastructure. Africa’s trade constraints are still heavily shaped by high transport costs and fragmented logistics networks. It is widely reported that trade costs in Sub‑Saharan Africa are among the highest globally, equivalent to tariffs of over 200% in some corridors when accounting for delays, poor roads, and border inefficiencies. The continent has a massive infrastructure investment gap, and rail freight remains underdeveloped compared to other regions. These gaps significantly limit the ability of surplus-producing countries to supply deficit regions efficiently.
The African Union’s Programme for Infrastructure Development in Africa (PIDA) was designed precisely to address these bottlenecks by prioritising transcontinental transport corridors, energy pools, and digital networks. The African Development Bank estimates that Africa faces annual infrastructure financing needs of roughly $130billion to $170-billion, with a financing gap of about $68-billion to $108-billion per year. Closing this gap has major trade implications, potentially increasing intra-African trade.
Financial infrastructure
Financial infrastructure is equally critical. One of the longstanding barriers to intra-African trade has been the reliance on third-party currencies (primarily the US dollar or euro) for settlements, which increases transaction costs and exposes traders to exchange-rate volatility. The Pan-African Payment and Settlement System (PAPSS), launched in 2022 by Afreximbank in partnership with the African Union and central banks, aims to address this by enabling real-time cross-border payments in local currencies.
Strengthening transport corridors and payment systems, therefore, acts as a buffer against external volatility, allowing African economies to rely more on regional supply chains and less on distant, shock-prone markets. In that sense, infrastructure and financial systems are not just enablers of trade, they are rather strategic safeguards. By lowering costs, improving connectivity, and reducing dependence on external currencies and routes, they provide the foundation for a more resilient and self-sustaining continental market.
Africa’s path to resilience is not about isolationism but strategic self-reliance. External shocks are eroding years of progress. The costs of inaction are too high.
African leaders, businesses, and citizens must rally behind AfCFTA, industrialisation, agricultural reform, and infrastructure. South Africa, as one of the most industrialised economy on the continent, can lead by example by investing in regional corridors and payment systems. Let’s build an Africa that trades with the world on its own terms, not at its mercy. The storms will come, but with these foundations, we can weather them together.
- Professor Ashenafi Fanta is head of the MPhil Development Finance at Stellenbosch Business School.
- Africa remains highly vulnerable to global economic shocks due to heavy reliance on external markets for imports and exports, with limited intra-African trade accounting for just 14% of total trade.
- Recent conflicts like the Russia-Ukraine war and Middle East crises have caused soaring food and oil prices, inflation, and economic instability across the continent.
- Promoting intra-African trade through the African Continental Free Trade Area (AfCFTA), industrialisation via development of manufacturing corridors, and agricultural transformation are key to strengthening economic resilience.
- Africa’s vast arable land remains underutilized, and improving agricultural productivity alongside robust infrastructure and transport networks is critical to boosting food security and intra-continental trade.
- Financial infrastructure improvements, such as the Pan-African Payment and Settlement System (PAPSS), alongside strategic investments by industrialized countries like South Africa, are essential to reducing dependency on external currencies and global market volatility.
Africa is a continent rich in resources and human potential, but it has long been at the mercy of global economic winds. Our economies are intertwined with the rest of the world in ways that often leave us exposed and vulnerable.
Recent years have accentuated this fragility.
It is time we confront the stark reality, as our heavy reliance on external markets for both exports and imports makes Africa susceptible to shocks originating far beyond its borders. When crises hit these markets, the ripple effects are immediate and devastating.
Africa's vulnerability primarily emanates from our limited intra-African trade, which accounts for just 14% of the continent's total trade volume.
For instance, the 2008 global financial crisis slashed demand for
Benin and Somalia obtained all their wheat from Ukrain and /or Russia, and Egypt depended on the two countries for over 80 percent of its wheat imports. Countries like Egypt, Tunisia, and several in East Africa faced acute food shortages, with wheat prices surging by 50 percent in some markets, exacerbating inflation and social unrest.
So, how do we shield ourselves from the shocks?
Yet, we must be realistic: with most African economies centered on primary commodities like minerals, oil, and raw agricultural products, the immediate potential for mutual trade is limited. What are we trading? Cocoa from Côte d'Ivoire to
African countries must invest in producing essential industrial goods that their neighbours demand, creating value chains within the continent.
While some corridors may focus on hi-tech manufacturing such as aerospace, pharmaceuticals, electronics, others may build medium technology manufacturing plants to produce motor vehicles petroleum products, basic metals and similar products that require medium level of R&D investment.
Countries with a nascent manufacturing sector can take advantage of low-tech industries such as food, beverages, textile, leather, wood products and furniture.
Equally critical is transforming Africa’s agriculture to generate reliable intra-African surpluses.
Crop yields across much of Sub-Saharan Africa remain significantly below global averages. For example, cereal yields average roughly 1.5–2 tons per hectare compared to over four tons globally.
None of this happens without robust infrastructure. Africa’s trade constraints are still heavily shaped by high transport costs and fragmented logistics networks. It is widely reported that trade costs in Sub‑Saharan Africa are among the highest globally, equivalent to tariffs of over 200% in some corridors when accounting for delays, poor roads, and border inefficiencies.
Financial infrastructure is equally critical. One of the longstanding barriers to intra-African trade has been the reliance on third-party currencies (primarily the US dollar or euro) for settlements, which increases transaction costs and exposes traders to exchange-rate volatility.
Africa's path to resilience is not about isolationism but strategic self-reliance. External shocks are eroding years of progress.
African leaders, businesses, and citizens must rally behind AfCFTA, industrialisation, agricultural reform, and infrastructure.
- Professor
Ashenafi Fanta is head of the MPhil Development Finance at Stellenbosch Business School.
