AfDB President Adesina warns of tariff ‘shock waves’

Speaking yesterday, Adesina highlighted potential declines in trade and rising debt-servicing costs as immediate consequences of the U.S. tariff actions.

His remarks come in the wake of unpredictable trade policies from U.S. President Donald Trump, who has recently introduced and then withdrawn a series of tariffs, unsettling global markets.

Currently, a 10% base tariff applies to all countries, with additional levies targeting Chinese imports. These measures, which upend decades of established trade norms, could extend further — putting 47 African nations at risk of even steeper tariffs.

According to Adesina, the impact could be severe: weakened local currencies due to reduced foreign exchange inflows, rising inflation driven by costlier imports, and growing debt burdens as government revenues decline.

“Increased inflation will follow as import costs rise and local currencies depreciate against the U.S. dollar,” Adesina stated during a speech at the National Open University of Nigeria in Abuja. He also touched on related issues such as declining foreign aid and migration pressures.

The ripple effects of these trade shocks may lead Europe and Asia to reduce their demand for African exports, further straining the continent’s economies. Adesina also expressed doubt about the renewal of the African Growth and Opportunity Act (AGOA), a key trade agreement set to expire this year. With 35 African countries currently benefiting from AGOA’s duty-free access to U.S. markets, its non-renewal could particularly hurt nations like Lesotho and Madagascar, known for exporting garments, diamonds, and vanilla.

As Adesina nears the end of his tenure at the African Development Bank, his focus has shifted toward the continent’s long-term prospects — from negotiating mineral deals to coping with reduced development aid and youth emigration.

He criticized the global financial system for failing Africa, especially in addressing debt, climate financing, and access to capital. Restrictive immigration policies in wealthier nations have further complicated labor mobility for Africans, he added.

The dismantling of USAID and cuts in European aid reflect a broader shift: “The traditional development models Africa has long relied on are no longer viable,” Adesina said.

Yet, he emphasized self-reliance. “Aid is not the key to development. Africa must stop depending on others to absorb its growing migrant population. Instead, it should focus on building the right environment for its youth to flourish at home.”

Adesina also raised concerns about Africa’s role in the intensifying global competition for critical minerals and rare earth elements. Without directly mentioning it, he alluded to a recent U.S. mineral deal with the Democratic Republic of Congo, urging African leaders to negotiate strategically.

“Africa must stop exporting raw materials and instead invest in processing and value addition to capture more gains from global value chains,” he asserted.