A new report by Boston Consulting Group warns that Africa is at a critical juncture in global trade as geopolitical shifts, tariff changes, and aid reductions reshape markets and expose vulnerabilities across the continent. The report, released in December 2025 and titled Seizing Opportunity in a Shifting Geopolitical Landscape, finds that while South–South trade is projected to grow by nearly 3.8% annually and developing economies in Asia and Latin America are emerging as global growth poles, Africa’s share of global trade remains at approximately 3% and accounts for only 4% of foreign direct investment.
This limited participation underscores the need for African governments and businesses to accelerate reforms, strengthen competitiveness, and capture more value in critical sectors such as agri-processing, green value chains, and critical minerals.
According to the research, short-term pressures are mounting, with tariff shifts and aid cuts expected to increase export costs and strain public finances. South Africa could face an estimated $2.6 billion in additional export expenses due to US tariff changes, while Kenya’s textile sector remains exposed to AGOA uncertainty. The report also warns that $50–70 billion in global development assistance is at risk, amplifying pressures created by sovereign debt challenges and higher borrowing costs for African governments. Beyond direct tariff impacts, the report highlights second-order effects including supply chain rerouting, declining demand for commodities used in global manufacturing, and increased import competition that could undermine Africa’s industrialization goals and local value chains.
Despite these near-term risks, the report identifies strong long-term fundamentals for Africa’s trade growth, supported by a young workforce, rising consumer markets, and abundant natural resources. However, Africa’s largest trade corridor with China continues to reflect historical imbalances, with the continent importing manufactured goods and exporting raw materials. Without a strategic shift toward value addition, regional manufacturing, and export diversification, Africa risks remaining primarily a consumption market rather than a global trade shaper. The report stresses that enhancing intra-African trade under AfCFTA, investing in regional infrastructure, and supporting industrial clusters remain essential to improving Africa’s competitiveness and trade resilience.
The authors argue that governments must pursue coordinated continental strategies to reduce trade frictions, unlock regional value chains, and improve logistics infrastructure, while national strategies should focus on sectors where countries possess comparative advantages such as agri-exports, critical minerals beneficiation, renewable energy supply chains, and nearshoring gateways linked to global markets. The report notes that these measures are crucial to strengthening Africa’s position within South–South trade flows and improving its ability to compete in shifting geopolitical landscapes.
Private sector leaders across Africa are beginning to respond, with one in three firms adjusting operations, supply partnerships, or market priorities to address geopolitical shocks. More than 90% of surveyed executives reported increased efforts to build trade resilience through scenario planning, attracting new investors, strengthening cyber defense, and advocating for reduced non-tariff barriers. The report emphasizes that businesses must develop stronger capabilities to monitor tariff policy, navigate regulatory changes, and align investments with emerging global trends such as sustainability standards and green value chains.
The report concludes that Africa cannot afford to take a passive stance as global trade realigns. The next phase of the continent’s growth will require a deliberate focus on value addition, regional integration, and strategic positioning in global supply chains. If African policymakers and businesses move decisively to address structural weaknesses, deepen intra-African trade, and leverage comparative advantages, the continent can secure a more influential role in global trade. Failure to act risks reinforcing import dependency and missing opportunities in sectors where demand is rising rapidly across the Global South.
