The Global South and US trade policy: Structural exposure and economic vulnerability in selected African countries

Stender, Frederik et al. Working Paper The Global South and US trade policy: Structural exposure and economic vulnerability in selected African countries IDOS Discussion Paper, No. 25/2025 Provided in Cooperation with: German Institute of Development and Sustainability (IDOS), Bonn Suggested Citation: Stender, Frederik et al. (2025) : The Global South and US trade policy: Structural exposure and economic vulnerability in selected African countries, IDOS Discussion Paper, No. 25/2025, ISBN 978-3-96021-270-6, German Institute of Development and Sustainability (IDOS), Bonn, https://doi.org/10.23661/idp25.2025 This Version is available at: https://hdl.handle.net/10419/324634 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ The Global South and US Trade Policy Structural Exposure and Economic Vulnerability in Selected African Countries Frederik Stender Tim Vogel Lukas Kornher Zoryana Olekseyuk Sascha Berndt Andreas Edele IDOS DISCUSSION PAPER 25/2025 The Global South and US trade policy Structural exposure and economic vulnerability in selected African countries Frederik Stender Tim Vogel Lukas Kornher Zoryana Olekseyuk Sascha Berndt Andreas Edele Bonn 2025 Dr Frederik Stender is a Senior Researcher in the research department “Transformation of Economic and Social Systems” at the German Institute of Development and Sustainability (IDOS) in Bonn. Email: [email protected] Dr Tim Vogel is a Researcher in the research department “Transformation of Economic and Social Systems” at IDOS. Email: [email protected] Dr Lukas Kornher is a Senior Researcher in the research department “Transformation of Economic and Social Systems” at IDOS. Email: [email protected] Dr Zoryana Olekseyuk is a Project Lead and Senior Researcher in the research department “Transformation of Economic and Social Systems” at IDOS. Email: [email protected] Sascha Berndt is a Trade Policy Expert at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Email: [email protected] Andreas Edele is a Trade Policy Expert at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Email: andreas.ed[email protected] The German Institute of Development and Sustainability (IDOS) is institutionally financed by the Federal Ministry for Economic Cooperation and Development (BMZ), based on a resolution of the German Bundestag, and the state of North Rhine-Westphalia (NRW) as a member of the Johannes-Rau-Forschungsgemeinschaft (JRF). Suggested citation: Stender, F., Vogel, T., Kornher, L., Olekseyuk, O., Berndt, S., & Edele, A. (2025). The Global South and US trade policy: Structural exposure and economic vulnerability in selected African countries (IDOS Discussion Paper 25/2025). German Institute of Development and Sustainability (IDOS). https://doi.org/10.23661/idp25.2025 Disclaimer: The analyses expressed in this paper are those of the author(s) and do not necessarily reflect the views or policies of the German Institute of Development and Sustainability (IDOS). Except otherwise noted, this publication is licensed under Creative Commons Attribution (CC BY 4.0). You are free to copy, communicate and adapt this work, as long as you attribute the German Institute of Development and Sustainability (IDOS) gGmbH and the author(s). IDOS Discussion Paper / German Institute of Development and Sustainability (IDOS) gGmbH ISSN 2751-4439 (Print) ISSN 2751-4447 (Online) ISBN 978-3-96021-270-6(Print) DOI: https://doi.org/10.23661/idp25.2025 © German Institute of Development and Sustainability (IDOS) gGmbH Tulpenfeld 6, 53113 Bonn Email: [email protected] https://www.idos-research.de Printed on eco-friendly, certified paper. IDOS Discussion Paper 25/2025 III Acknowledgements We are grateful to Clara Brandi, Christoph Sommer and Tim Röthel for their valuable feedback. We also sincerely appreciate the insightful discussions with colleagues from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Trade Division at the German Federal Ministry for Economic Cooperation and Development (BMZ) on an earlier version of this paper. Special thanks go to Melike Döver for generously sharing her insights on value addition in the apparel sector within the Southern African Development Community (SADC). The views expressed in this paper reflect the personal opinions of the authors. Any remaining errors are our responsibility. IDOS Discussion Paper 25/2025 IV Abstract United States (US) trade policy has undergone a series of significant changes introducing farreaching uncertainty for trading partners in both the short and long term. Among the most vulnerable to these changes are lowand middle-income countries. Anticipating the potential impact of proposed or enacted US trade measures ex-ante is difficult. Therefore, this discussion paper examines the structural vulnerabilities of a selection of African countries – Lesotho, Madagascar, Côte d’Ivoire, South Africa, and Tunisia – to recent shifts. Using descriptive trade data, the paper maps direct and indirect channels of exposure and highlights the structural constraints that amplify vulnerability. While Africa is not among the most directly exposed regions, several countries face significant risks due to concentrated export structures, reliance on a few trade partners, and limited capacity to redirect trade in the short term. This highlights the strategic importance for African countries to strengthen regional integration, industrial upgrading, and reduce external dependencies. IDOS Discussion Paper 25/2025 V Contents Acknowledgements Abstract Preface Abbreviations 1 Introduction 1 2 Mapping exposure, vulnerabilities and policy response capacities across Africa 2 2.1 Lesotho 3 2.2 Madagascar 5 2.3 South Africa 7 2.4 Côte d’Ivoire 9 2.5 Tunisia 11 3 Concluding remarks 13 References 14 Figures Figure 1: Exports to the United States as per cent of total exports 2 Figure 2: Lesotho’s export shares of goods by destination 3 Figure 3: Madagascar’s export shares of goods by destination 5 Figure 4: South Africa’s export shares of goods by destination 8 Figure 5: Côte d’Ivoire’s export shares of goods by destination 10 Figure 6: Tunisia’s export shares of goods by destination 11 IDOS Discussion Paper 25/2025 VI Preface Since President Donald Trump’s return to office, United States (US) trade policy has undergone a series of significant changes, with further far-reaching shifts remaining uncertain in both the short and long term. While the US-China trade war and its resulting arrangements during his first term already clashed with World Trade Organization (WTO) rules, the current administration is now going further by actively undermining the multilateral trading system. Most notably, it has threatened to impose so-called “reciprocal tariffs” on trading partners. These proposed tariffs mark a sharp departure from the WTO’s core principles of reciprocity and non-discrimination, signalling a broader US pivot towards a power-based approach to trade negotiations. This shift is evident in the increased pressure placed on trading partners to enter bilateral negotiations, coupled with the erratic nature of US tariff plans in both content and timeline. What looms ahead is a potential patchwork of inconsistent and unpredictable trade rules. Yet the actual imposition of tariffs is only part of the story. Economic research has long emphasised the detrimental effects of policy uncertainty on trade performance. With Trump’s open embrace of protectionism, this uncertainty has moved from the margins to the centre – casting a long shadow over global trade. Anticipating the potential impact of proposed or enacted US trade measures ex-ante is difficult, as their scale and nature exceeds most historical precedents. Traditional trade models may thus prove inadequate in capturing the complex and dynamic effects of these shifts in the current geopolitical and economic landscape. Moreover, the shift towards protectionist and discriminatory policies is likely to generate unpredictable effects for both overall trade patterns and specific global value chains (GVCs), with highly uneven impacts across countries. Among the most vulnerable to these changes are lowand middle-income countries (LMICs), which typically export raw materials, apparel and other low-cost goods to the US while importing relatively few high-value American products. These structural asymmetries leave LMICs particularly exposed to both direct tariff hikes and broader disruptions in global trade patterns. Against this background, this paper is part of a series of discussion papers that explores structural trade linkages between selected LMICs and the US, drawing on recent trade data through descriptive analysis. The series identifies both direct and indirect trade vulnerabilities, while also highlighting potential opportunities arising from the ongoing shift in US trade strategy. These insights aim to support policymakers in LMICs and their international partners in crafting informed, pro-active responses to an increasingly uncertain trade environment. IDOS Discussion Paper 25/2025 VII Abbreviations AfCFTA African Continental Free Trade Area AGOA African Growth and Opportunity Act BACI Base pour l’Analyse du Commerce International DCFTA Deep and Comprehensive Free Trade Area EPA Economic Partnership Agreement EBA Everything but Arms EU European Union EU-ESA iEPA Interim Economic Partnership Agreement with the countries of Eastern and Southern Africa FDI Foreign direct investment GSP Generalised System of Preferences GVCs Global value chains GDP Gross domestic product LMICs Lowand middle-income countries MFN Most Favoured Nation REX Registered Exporter SADC Southern African Development Community UN United Nations US United States WTO World Trade Organization IDOS Discussion Paper 25/2025 7 Further risks arise from dynamic developments in global trade. Countries such as Vietnam and Bangladesh are pursuing comprehensive free trade agreements with the US, which could undermine the price competitiveness of Madagascar’s apparel exports. These developments pose particularly severe risks for women, who make up approximately 80 per cent of the sector’s workforce (ILO, 2025). Diversifying export markets is thus strategically important for Madagascar, but remains challenging in practice. The African market is not a major destination for many of the country’s agricultural and apparel exports. Non-tariff trade barriers such as high transportation costs, inadequate infrastructure, and regulatory opacity further limit regional trade potential (Tandrayen-Ragoobur et al., 2022; Yang & Gupta, 2007). The EU offers dutyand quota-free access for all goods through the interim Economic Partnership Agreement with the countries of Eastern and Southern Africa (EU-ESA iEPA), as well as the Everything but Arms (EBA) initiative. While the combined usage of both preference schemes has consistently been high, the use of EBA trade preferences rose to 50 per cent in 2023, facilitated by the introduction of simplified procedures under the Registered Exporter (REX) system (European Commission, 2025a). A key factor behind this increase is the improved rules of origin for apparel, which have made it easier for Madagascar to access the European market and have strengthened the competitiveness of its apparel products. Given the high preference usage already, the EU presents only a limited additional opportunity to further foster Madagascar’s exports. This is particularly true in the apparel sector, where competition is intense due to countries such as Bangladesh, Vietnam and Pakistan. These competitors also benefit from special tariff treatment under the EU’s tariff preference schemes or bilateral trade agreements and often enjoy greater economies of scale and more efficient logistics systems. Asian markets remain largely inaccessible for Madagascar’s apparel, as most countries in the region have their own production capacities and limited demand for African apparel products. In contrast, some niche opportunities exist in the agricultural sector (for example, vanilla exports to Japan and China), but these markets are limited in volume. 2.3 South Africa The US is South Africa’s second most significant trading partner, accounting for approximately 7.5 per cent of the country’s total exports (see Figure 4). China is by far the largest single country export destination, followed by Germany, India, the United Kingdom and Japan, each with slightly smaller shares than the US. South Africa also serves as the leading commercial hub in Southern Africa, exporting substantially to fellow members of the SADC. Exports constitute about 30 per cent of South Africa’s GDP, with exports to the US representing around 2.5 per cent of GDP. While not insignificant, this falls short of suggesting strong economic dependence. While South Africa maintains a diversified range of export destinations, the composition of its exports also varies considerably across trading partners. Roughly half of South Africa’s exports to the US consist of ores, stones, and minerals. The country’s top individual exports to the US are jewellery, gemstones and precious metals, which together account for about 3.5 per cent of South Africa’s total exports. This product group shows a high degree of market concentration, with approximately 11 per cent of these exports destined for the US market. Notably, however, this reliance is reciprocal: South Africa supplies around 6 per cent of total US imports in this category. The US import dependency is even more striking in the case of ores (slag and ash), where South Africa provides nearly 27 per cent of US imports – despite ores exports to the US making up just 0.4 per cent of South Africa’s total exports. IDOS Discussion Paper 25/2025 8 Figure 4: South Africa’s export shares of goods by destination Source: Authors. Created with Datawrapper, based on data from Gaulier and Zignago (2010). Beyond these categories, other notable South African exports to the US include vehicles and metals (particularly iron and steel) with each accounting for approximately 0.5 per cent to 0.6 per cent of South Africa’s total exports. In aggregate, these exports represent only about 0.15 per cent to 0.2 per cent of the country’s GDP, rendering them relatively insignificant in the broader economic context. In contrast, China, Japan and the United Kingdom primarily import raw materials from South Africa. Exports to neighbouring SADC countries, however, are more diversified, encompassing not only agricultural products, but also chemicals, vehicles and machinery. This reflects South Africa’s role as a regional platform for industrial production. Manufacturing generally plays a central role in South Africa’s economic strategy and labour market. Within this sector, the automotive industry is particularly significant, directly employing around 110,000 people and representing approximately 4.3 per cent of the country’s GDP (South African Government, 2024). Notably, the industry is deeply integrated into GVCs, underscoring its importance beyond national borders. There is, however, a notable distinction between South Africa and other African countries involved in automotive value chains. While Morocco and Tunisia primarily focus on supplying components and parts (see Section 2.5), South Africa is oriented more towards final assembly and full-scale vehicle production. The country has an established automotive sector with large assembly plants operated by international manufacturers such as BMW, Mercedes-Benz, Volkswagen, Toyota, Ford and Nissan. While not the most significant export industry to the US in absolute terms, South Africa’s automotive exports to the US have notably benefited from dutyand quota-free access under AGOA, which now has an uncertain future. Currently, around 8 per cent of South Africa’s total vehicle exports are destined for the US market. A key driver of this trade is BMW, whose models are positioned in the premium segment. While South Africa’s BMW plant competes to some extent with its US counterpart, a politically motivated shift in production to the US cannot be ruled out. However, from a business perspective, the South African facility does not appear to face an immediate threat, as scaling IDOS Discussion Paper 25/2025 9 up production in the US would not be achievable quickly. Moreover, unlike component supply, final vehicle assembly is difficult to relocate quickly, as it depends on a long-established base of technical expertise and skilled labour. In the short term at least, this reliance may outweigh the loss of the cost advantage from lower labour costs following the expiry of AGOA. Although the potential expiry of AGOA poses a significant risk to South Africa’s vehicle exports to the US, South Africa’s export business to the US may face an even greater challenge from the already imposed 50 per cent tariffs on steel and aluminium (The White House, 2025b). While both sectors have historically been subject to global tariff exposure, including from both the US and South Africa, they involve relatively homogeneous goods that are easily substitutable. This makes it feasible for the US to replace South African imports with domestic production or alternative international suppliers. While the absolute export values remain within the moderate range, a more pressing concern is South Africa’s high export concentration to the US in these sectors. Approximately 10 per cent of its steel exports and 22 per cent of its aluminium exports are directed to the American market. In contrast, the US maintains a highly diversified sourcing base for both products, reducing its dependency on any single trade partner. In response to these trade policy disruptions, South Africa could pursue several strategic options. In the short term, one possible lever is to highlight US dependence on South African imports of jewellery, gems and precious metals, and in particular ores. All of these sectors are less easily substitutable supply sources and have a higher market concentration. Over the longer term, South Africa would benefit from diversifying its export portfolio to the US. In addition, the development of the battery value chain offers important opportunities to both diversify South Africa’s automotive production portfolio and expand its export markets. Although the country does not yet manufacture EV battery cells domestically, it is actively developing capabilities in electric vehicle battery components and assembly (The World Bank, 2023). 2.4 Côte d’Ivoire While the US is not Côte d’Ivoire’s main export destination, it nonetheless represents an important market for certain key products, particularly cocoa beans. Only around 7 per cent of the country’s exports go directly to the US (see Figure 5). Roughly 40 per cent are destined for Europe, about 20 per cent for Asia, and around one quarter for other West African countries. Cocoa is Côte d’Ivoire’s most important export good, accounting for around 75 to 80 per cent of the country’s global exports. About 15 per cent of these cocoa exports go to the US, representing over 5 per cent of total exports and around 1.3 per cent of GDP. Côte d’Ivoire is also by far the most important supplier of cocoa beans to the US, accounting for roughly 50 per cent of total US imports. Overall, nearly half of the country’s workforce is employed in agriculture, with over 1 million people working in the cocoa value chain (International Cocoa Initiative, 2019). Rubber and rubber-based products are Côte d’Ivoire’s second most important export good. Exports of natural rubber to the US account for around 0.85 per cent of total exports and approximately 0.2 per cent of GDP. Côte d’Ivoire is an important supplier of raw materials for global tire production (including Bridgestone, Michelin and Continental). Globally, Côte d’Ivoire is the third-largest exporter of natural rubber. The government aims to retain a greater share of value added domestically in the medium term (“upgrading”), such as through increased local processing (Gouvernement de la République de Côte d’Ivoire [Government of the Republic of Côte d'Ivoire], 2019). So far, however, a large portion of rubber – around 30 per cent – is exported to China. IDOS Discussion Paper 25/2025 10 Figure 5: Côte d’Ivoire’s export shares of goods by destination Source: Authors. Created with Datawrapper, based on data from Gaulier and Zignago (2010). Although exports to the US account for only a small share of Côte d’Ivoire’s total exports, potential protectionist trade policy can introduce a significant burden, especially on cocoa trade. While the US has long applied MFN tariffs on finished products such as chocolate and tires, Côte d’Ivoire’s two most important export goods (cocoa and rubber) have so far been exempted (The World Bank, 2025). As a result, AGOA has played only a limited role for the country. Due to its strong focus on agricultural commodities and raw materials, Côte d’Ivoire is highly vulnerable to volatile prices and climate-related risks. Cocoa farmers are already under pressure due to climate-related crop failures in recent years (IMF, 2024). With women making 70 per cent of the cocoa workforce, the development of this sector also holds considerable gender policy relevance (UN Women [United Nations Entity for Gender Equality and the Empowerment of Women], 2017). Other important export products include gold (primarily exported to Switzerland), oil and cashew nuts. However, these goods are rarely exported to the US market. Nonetheless, Côte d’Ivoire’s reliance on these sectors exposes it to significant risks stemming from price fluctuations and the impacts of climate change. Côte d’Ivoire is also integrated into international value chains (via Europe and Asia) that depend on access to the US market. For example, European chocolate manufacturers process Ivorian cocoa and export the finished products to the US. Similar indirect linkages exist in the rubber sector: European and Asian tire producers use Ivorian natural rubber in their manufacturing processes and sell the final products to the US market. Therefore, as exports to both the EU and China consist mainly of intermediate goods, there is a significant indirect risk that final goods incorporating Ivorian inputs could be subject to US tariffs. The potential to redirect exports to alternative markets is limited. Côte d’Ivoire already enjoys dutyand quota-free access to the EU under the EBA initiative and, since 2019, through the EPA, which is particularly relevant for certain cocoa tariff lines. Some additional export potential may exist for rubber exports to China, where the current 20 per cent tariff on technically specified natural rubber could be lowered to zero as part of China’s announced tariff reductions for African countries. However, cocoa and rubber are not produced in the US and are therefore not easily substitutable. As a result, the impact on Côte d’Ivoire depends heavily on how trade policies affect its IDOS Discussion Paper 25/2025 11 competitiveness relative to key exporters. In the rubber sector, Côte d’Ivoire competes mainly with Indonesia, Thailand, Liberia, Ghana, Malaysia and Vietnam, and in cocoa with Ghana, Ecuador and the Dominican Republic. In the recent “reciprocal” tariff announcements, Côte d’Ivoire was positioned mid-range, with a proposed tariff of 21 per cent. 2.5 Tunisia Compared to many other African countries, Tunisia’s economy is notably less reliant on foreign trade and is strongly shaped by the services sector. Services account for over 60 per cent of GDP, with tourism playing a particularly central role. This structure lends Tunisia a degree of resilience against global trade policy disruptions and is also reflected in the country’s external balances: While Tunisia runs a current account deficit, it maintains a surplus in its services trade. The country’s primary goods export markets are France, Italy and Germany, which together account for more than half of Tunisia’s exports (see Figure 6). Figure 6: Tunisia’s export shares of goods by destination Source: Authors. Created with Datawrapper, based on data from Gaulier and Zignago (2010). Tunisia’s ten most significant export goods to the US account for just over 3 per cent of the country’s total exports. Among these, particularly noteworthy are animal or vegetable fats and oils (especially olive oil), compromising around 0.95 per cent of total exports. The value of these exports to the US represents approximately 0.4 per cent of Tunisia’s GDP. More important than the absolute figures, however, is the high market concentration of certain product categories in the US market. Roughly 24 per cent of Tunisia’s total exports of vegetable fats and oils are destined for the US. This concentration is even more striking in the case of fertilisers, nearly 36 per cent of which are exported to the US. As a result, these sectors are particularly vulnerable to shifts in US trade policy. The fertiliser sector is further exposed due to the intense competition in the US market. In 2023, Tunisia supplied about 8 per cent of US fertiliser imports. Other major suppliers include Morocco (14 per cent), Saudi Arabia (22.5 per cent), and countries such as Russia, Israel, Australia, Canada and Mexico, each with market shares between 6 per cent and 8 per cent. Announced “reciprocal” tariffs or selective bilateral trade agreements with the US could significantly reshape IDOS Discussion Paper 25/2025 12 competitive dynamics by introducing new preference margins. This risk is amplified by the fact that Tunisia primarily exports standardised, phosphate-based fertilisers, which are more exposed to price competition than more specialised products. At the same time, the US market also exhibits a degree of dependence on imports from Tunisia. Around 7 per cent of US imports of vegetable fats and oils originate from Tunisia, as do approximately 5.5 per cent of fertiliser imports and 9 per cent of fruits and nuts, including citrus and melon peels. While certain subcategories such as citrus fruits tend to be relatively homogeneous, the broader category of fruits and nuts encompasses a diverse range of products characterised by natural variability and distinct consumer preferences. This diversity may contribute to a degree of stability and resilience in Tunisia’s export relationship with the US. Another layer of risk stems from Tunisia’s integration into GVCs. Although the country is not a leading global supplier in the automotive sector, it plays a vital role in the European supply network thanks to its geographic proximity to the EU and comparatively low labour costs. Tunisia is particularly important in the production of wiring harnesses and electronic components. Roughly 16 per cent of Tunisia’s total exports are electronic products, with Germany, France and Italy as the primary destinations. As a result, Tunisia is indirectly exposed to transatlantic trade tensions and an escalation in trade disputes between the EU and the US, especially in the automotive sector, could have significant knock-on effects. While Tunisia’s economy is overall relatively resilient to US trade policy shocks, thanks to limited direct trade exposure and a strong services sector, de-risking options for its fertiliser and agricultural exports remain quite limited. In the short term, opportunities to redirect Tunisia’s fertiliser exports to alternative markets appear constrained. In 2023, Italy (15 per cent), Turkey (9.7 per cent) and India (8.6 per cent) were important destinations for Tunisian fertilisers. However, both Italy and Turkey source imports from a wide range of countries, limiting Tunisia’s potential to further increase market share. Meanwhile, India’s import market is dominated by China, leaving little room for Tunisia to expand there. Looking further ahead, diversification of markets for agricultural exports most directly affected by US trade policy could find new opportunities within the EU. Tunisia’s trade relations with the EU are currently governed by the 1995 EU-Tunisia Association Agreement, which came into force in 1998. While industrial goods enjoy duty-free access, agricultural, food and fishery products remain only partially liberalised. Moreover, the EU continues to apply tariffs and quotas (European Commission, 2025b), largely to protect domestic producers in these sectors. Tunisia could capitalise on the current political momentum to revive stalled negotiations for a Deep and Comprehensive Free Trade Area (DCFTA) with the EU. Such an agreement could secure improved tariff treatment, opening new market opportunities for Tunisian agricultural exports. Furthermore, deeper cooperation on EU norms and regulatory standards would strengthen this trade channel and align interests more closely. Indeed, evidence suggests that removing protectionist barriers especially in agriculture could lead to substantial trade growth for Tunisia (e.g., Cardozo et al., 2022), reinforcing the potential benefits of advancing the DCFTA talks. IDOS Discussion Paper 25/2025 13 3 Concluding remarks In this paper, we examined the structural exposure of five African countries to the Trump administration’s increasingly protectionist and unpredictable trade policies. While Africa is not among the most directly affected regions, several countries and sectors face non-negligible risks, particularly those reliant on AGOA-supported apparel exports or key agricultural commodities. For these economies, the combination of tariff threats, uncertainty over preferential regimes, and broader shifts in GVCs can result in significant economic losses, both immediate and dynamic. Short-term options for redirecting their exports remain limited. Hence, this period of heightened trade policy uncertainty underscores the need for more resilient and diversified trade structures in Africa. Looking ahead, Africa’s long-term economic prospects lie in the strengthening of intra-African trade, industrial upgrading, and diversification beyond raw materials. Regional initiatives such as the AfCFTA offer platforms to expand markets, deepen value addition and reduce external vulnerability. At the same time, targeted investments in infrastructure, institutions and regional production networks will be essential. External partners may also have a role to play. As competition for strategic resources needed for high-tech industries and the green transition intensifies, the continent’s importance is rising on the global stage. Both China and the EU have signalled stronger engagement, offering market access and strategic partnerships, especially in energy and critical minerals. 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