Slowing global trade, yet Africa’s integration opportunity grows

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JEREMY MAGGS: Global trade is slowing, supply chains are fragmenting and climate rules are fast becoming market gatekeepers.

As trade tensions rise and growth cools, Africa is facing a defining moment. Either adapt to a more complex global system or risk being left behind.

In that respect, I want to talk to Luz Maria de la Mora from the United Nations Trade and Development Unit to unpack where Africa stands right now in this shifting global trade order. Thank you very much for joining us.

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Maybe we could start with a very brief global overview. Let me ask you how unsettled the stage is right now because of all of the increasing geopolitical tensions that we seem to witness day by day.

LUZ MARIA DE LA MORA: Well, certainly we are seeing a lot of uncertainty and a lot of unpredictability in the global economic environment. That obviously is not the kind of environment that investors need in order to be able to trigger economic growth.

What we’re seeing is that global growth this year will keep more or less at the same level as last year, at 2.6%.

That’s what we are seeing; that the global growth will remain subdued.

Now, something important is that trade normally used to be an engine of economic activity and economic growth for countries, and trade has been, even though it’s been growing and we expect trade to grow probably in 2026, around 5%, 6%, there is still some slowdown in certain sectors, and we also expect that to happen.

But we think that South-South trade has some opportunities.

JEREMY MAGGS: Well, let’s talk about those opportunities in just a moment. But I’m interested to hear you use the word subdued. Maybe you could tell us how exposed then Africa is to this slowdown that we’re likely to witness in 2026. Where’s the vulnerability here?

LUZ MARIA DE LA MORA: Well, African economies, like other regions, are quite exposed to the global slowdown of the world economy, and there are a few areas.

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For example, the first I would say is that many countries in Africa rely heavily on commodities like, for example, oil, gas, minerals or agricultural products, and when global demand weakens or prices swing, these revenues take an immediate hit.

A second area has to do with the fact that Africa’s export markets are largely outside the continent.

When advanced economies or their markets slow down, the exports of Africa are also heavily impacted.

So African export earnings could drop down.

A third one has to do with the tighter global financial conditions that are making things tougher. We are seeing high interest rates, even though they are coming down, interest rates for African countries are still very high, historically high, and that affects investment flows.

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So for many countries, they are already carrying high levels of debt and repayment costs are now one of the biggest risks for their economic stability.

Overall, I would say that the combination of commodity dependence, external demand pressure and costly financing makes African economies sensitive to global headwinds.

JEREMY MAGGS: If there is that dependence then on external demand, as you suggest, do you think in any way African economies are becoming a little more resilient? Are we becoming perhaps better equipped to handle the headwinds that you outline?

LUZ MARIA DE LA MORA: Yes, definitely, we are seeing some bright spots for Africa. I would say, on one hand, we are seeing an increase in trade and exports of Africa to developing countries, South-South trade. It’s not only the traditional export markets in the EU or the US, but it’s also developing countries in Asia that are acquiring African products.

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I would say that the African Continental Free Trade Area (AfCFTA) is really building. It’s a new project, but it’s a very important project where integration has proven to be a trigger for economic activity.

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What we need to take care of is the long-term perspective. Do not lose track and keep building on that framework for Africa.

JEREMY MAGGS: I’m glad you mentioned the African Continental Free Trade Area. I guess the question, though, is whether it’s moving fast enough to matter in this more fragmented global trading system that you’ve outlined.

LUZ MARIA DE LA MORA: I think the question is really a matter of implementing on time all of the commitments, because there are many commitments in the African Continental Free Trade Area that also are related to subregional integration schemes that already exist.

I would say that the value of the African Continental Free Trade Area is that it sets a framework for all of the 53 countries that are part of it, and it sets a clear path for transparency, for tariff reduction, for NTM (Non-Tariff Measures) streamlining, and for making sure that Africa is one continent that is linked.

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Another thing that we see is that there’s a need to build infrastructure. Connectivity is key to integrate Africa and to make sure that Africa can profit from the Africa Continental Free Trade Area.

JEREMY MAGGS: It’s interesting to read that services and digital trade are growing the fastest worldwide, yet Africa lags badly. What in that respect do you think is holding the continent back?

LUZ MARIA DE LA MORA: Well, I would say several things. First, Africa traditionally has been an exporter and producer of commodities and manufactured (goods).

Africa needs to make inroads in the services sector, which it is already doing.

Let me give you one example, it has to do with digital services in the financing sector or the transition to renewable energy. There’s a lot of investment that is happening, but it needs to happen.

Read: SA banks step up Africa drive amid fintech rivalry

So you need, on one hand, infrastructure and on the other hand, you also need to develop strategies on which services are key for the integration.

Logistics, for example, telecommunications, roads, services for the business community. Then you also need to have people who are skilled. Services require different types of skills from the manufacturing sector.

You need to have a skilled workforce in Africa that can support the services sector, which is also essential to support the export value chain of African countries into the region.

I would say that Africa has promising areas of resilience, but also of opportunity in the services sector, not only to participate in international trade globally, but also to deepen the integration within Africa.

JEREMY MAGGS: That’s where I am going to leave it with my thanks. Luz Maria de la Mora from UN Trade and Development, I do appreciate your time. Thank you very much.

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