Double shock therapy: Why Africa must rethink, rebuild, and rise

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OPINION

By Jonas Mbabazi Musinga

The recent one-two punch of steep US tariffs and sweeping aid cuts has delivered what can only be described as a double shock therapy to Africa.

For decades, African economies have leaned heavily on preferential trade access and donor support, especially from the United States. But with tariffs now crippling key exports and aid flows drying up, the continent faces a harsh but necessary wake-up call. This policy shift threatens key industries, undermines development efforts, and challenges the stability of economies across the continent. This moment, while painful, offers a critical opportunity: to rethink dependency-driven growth models, rebuild local and regional economic resilience, and rise toward self-reliance. The question is no longer if Africa can adapt, but how fast it will act to secure its future.

The current US administration’s imposition of tariffs ranging from 30% to 50% on imports from several African nations marks a sharp departure from the preferential trade benefits once enjoyed under the African Growth and Opportunity Act (AGOA). These tariffs are already triggering serious consequences across the continent.

In Lesotho, where the garment industry contributes 20% to GDP and employs 30,000 people, a 50% tariff on exports threatens the $237m sector’s survival. Madagascar faces a 47% tariff that could decimate its textile industry, which supports about 180,000 workers. Mauritius, burdened with a 40% tariff on key exports like textiles and seafood, risks declining foreign exchange earnings. Botswana’s beef exports are now subject to a 37% tariff, with serious implications for rural livelihoods.

Meanwhile, South Africa’s citrus industry—responsible for over 6.5 million cartons annually to the US—faces a 30% tariff that jeopardises 35,000 jobs. The added cost of $4.25 per carton in the US market threatens to make South African citrus products uncompetitive.

Alongside trade disruptions, drastic US aid reductions are compounding the blow. The rollback includes deep cuts to the President’s Emergency Plan for AIDS Relief (PEPFAR) and other critical health and development programs. In fiscal year 2023 alone, US assistance invested $10.6b in HIV/AIDS programs and $1.5b in responses to diseases like Ebola, malaria, and tuberculosis—mostly in Africa.

The dissolution of USAID programs will severely weaken infectious disease surveillance and public health systems—increasing the vulnerability of the tail-end target beneficiaries. Countries like Ethiopia, DRC, Kenya, and Tanzania each face aid reductions exceeding $200m, affecting health, education, and infrastructure sectors. Liberia, with the largest cut relative to its economy (1.6% of GNI), faces serious risks to economic stability.

Climate-specific funding is likely to shrink, weakening the capacity of African nations to invest in renewable energy, climate-resilient infrastructure, early warning systems, and ecosystem restoration. The redirection of attention toward domestic priorities in the US will reduce its engagement in international climate diplomacy and financial pledges, weakening global momentum.  This will further delay Africa’s access to climate finance under frameworks like the Paris Agreement. Overall, these cuts are expected to push an additional 5.7 million Africans into extreme poverty within a year, reversing development gains and heightening vulnerability across the continent.

African countries must urgently rethink their economic strategies to mitigate the adverse effects of recent US policy changes. One key step is to invest in value addition—moving away from exporting raw materials to producing finished goods. Developing strong manufacturing and agro-processing industries will not only boost competitiveness in global markets but also create much-needed jobs across the continent. By climbing up the value chain, African economies will unlock greater income, reduce vulnerability to commodity price swings, and build long-term resilience.

In addition, enhancing intra-African trade through the African Continental Free Trade Area (AfCFTA) is critical. AfCFTA presents an unprecedented opportunity to build a more integrated, self-reliant African market. By reducing trade barriers and improving cross-border infrastructure, countries can expand market access, foster industrial growth, and cushion against external shocks. At the same time, diversifying trade partnerships—such as tapping into China's tariff-free offers to 33 African countries—will help reduce overdependence on the US and create alternative paths for growth.

Finally, strengthening domestic policies is essential. African governments must focus on economic diversification, improving the business climate, and investing in human capital. This includes promoting innovation, supporting small and medium enterprises, and bolstering critical sectors like education and healthcare. While the US tariffs and aid cuts pose real threats, they also provide a moment of reckoning. With the right mix of reforms, partnerships, and regional cooperation, Africa can turn this "double shock" into a launchpad for a stronger, more independent future.

The writer is a Research Fellow at ACODE./ jmbabazi@acode-u.org