The IMF/World Bank meetings and resolutions may have provided that important moment of epiphany for African policy makers.
The atmosphere was pleasantly warm and the venue was the International Monetary Fund (IMF) headquarters in Washington DC, United States. Amid side-talks and banters, Ngozi Okonjo-Iweala walked briskly towards a section of the press gallery, and it seemed obvious that she was prepared for a TV interview as much as she was for the daunting tasks ahead. In the midst of global uncertainties, she had her work cut out for her.
Throughout the days preceding that Friday, the fifth day of the World Bank/IMF 2025 spring meetings, Mrs Okonjo-Iweala had interacted with global leaders, ministers of finance, and governors of central banks gathered in Washington D.C from different parts of the world.
As Director-General of the World Trade Organisation (WTO), she has been at the centre of heated debates, deliberations, trade negotiations and all-round uncertainties in the last few weeks since US President Donald Trump sent the world into confusion with the announcement of his controversial tariff policies.
More importantly, Mrs Okonjo-Iweala carries the weight of responsibility as one of the most influential African voices in the decision-making bodies influencing the dynamics of the global economy, business, and trade.
That Friday afternoon in D.C, she was on her way to the airport, yet she couldn’t but yield to urgent interview requests from reporters and TV crews from different parts of the Africa waiting for her insights and thoughts on the place of Africa and the direction of global trade in the wake of the US-China tariff tensions.
“(T)he problem is that within Africa, there are a handful of countries that are very severely impacted because they’ve got high reciprocal tariffs put on them, and these are poor countries,” Mrs Okonjo-Iweala told a gathering of Nigerian journalists, in response to questions on how much impact the global uncertainty trailing the tariff war would have on the economies of African countries.
Before serving as WTO head, Mrs Okonjo-Iweala had a 25-year career as a development economist at the World Bank, rising to become Managing Director for Operations from 2007 to 2011.
Back home in Nigeria, she served two terms as finance minister under President Olusegun Obasanjo from 2003 to 2006, and later, under President Goodluck Jonathan from 2011 to 2015. Between June and August 2006, she also served as Minister for Foreign Affairs of Nigeria.
At the Brookings Institution, she was a non-resident distinguished fellow with the Africa Growth Initiative in their Global Economy and Development Programme, a position that, among other experiences, gave her a panoramic view of Africa’s growth trajectory.
Africa needs investment, she argued, and that pathway can only be strengthened by mutual understanding and regional cooperation in the midst of dwindling aid support.
“It’s very clear. Aid is disappearing; we (Africa) need investment,” she said of the place of Africa in the emerging global economy and looming uncertainty. “When you need investment, you have to do so much more in terms of mobilising domestic resources to put infrastructure in place, removing bureaucratic barriers so investment can come in.”
Domestic Resources Vs. Donor Aid
For decades, Africa has relied on aid from donors in different parts of the world to implement plans in health, education and other key areas of human development. Until 2022 and 2023, when Russia’s invasion of Ukraine ballooned aid from the United States to that region, sub-Saharan Africa received more US aid money than any other region, per United Nations and OECD data.
But since President Trump announced the decision to dismantle the US Agency for International Development (USAID), there has been a massive decline in aid intervention coming into sub-Saharan Africa – with attendant impact on efforts to pull people out of poverty and combat terrorism across the region.
Last month, the Organisation for Economic Co-operation and Development (OECD) reported that global aid flows fell sharply in 2024, marking the first decline in official development assistance, or ODA, from major donor countries in half a decade. The downturn was attributed to a change in donor priorities following a sharp decline in funds earmarked for Ukraine, a significant drop in refugee-related costs within donor countries, and reduced humanitarian spending.
According to the IMF regional outlook for sub-Saharan Africa released at the 2025 Spring meetings, global ODA flows have increased over the past decade, but flows to sub-Saharan Africa have remained flat. The report said ODA to all destinations reached $246 billion in 2023, representing an increase of 64 per cent over a period of 10 years. But much of that increase reflects a recent sizable pickup in transfers to Ukraine.
“For sub-Saharan Africa, flows reached $51 billion in 2023–this represents a steady decline over the past two decades, both as a fraction of regional GDP and as a share of total ODA flows,” the latest regional economic outlook showed.
Can intra-African trade turn the tide?
To turn the tide, reposition the continent and withstand the shocks and ripple effects of disappearing aid and global trade tensions, Mrs Okonjo-Iweala believes that African leaders must deepen trade integration among African countries.
“And this is what we need to do, and we need to trade more. We cannot trade more externally, where our trade is only 3 per cent of world trade, or internally, where intra-Africa trade is 16 to 20 per cent at most,” she noted.
Her thoughts echo those of Akinwunmi Adesina, African Development Bank Group President, who argued, too, that Africa must wean itself from aid dependency and urgently chart its future through self-reliance, strategic partnerships, and leveraging its vast natural resources.
Mr Adesina, who spoke within the same month in Abuja at the 14th Convocation Ceremony of the National Open University of Nigeria (NOUN), quipped: “The recent dismantling of the official development aid agency in the US, and similar anti-aid measures in other parts of Europe, means that the old development models that Africa has always relied on will no longer work.”
Before assuming office at the AfDB, Mr Adesina served as Nigeria’s Minister of Agriculture and Rural Development from 2011 to 2015. His tenure at the regional bank, which affords him the opportunity of seeing Africa’s developmental growth and challenges from a front-row position, began in September 2015. He was re-elected for a second five-year term in August 2020, and his current tenure is set to conclude in September.
Mr Adesina argued that the era of aid or free money is gone, and “African countries must now learn to develop via investment discipline. Countries can no longer rely on aid for growth or count it as part of government revenue, as has been the case for decades. Benevolence is not an asset class.”
Lesotho as a metaphor
When the US government announced its tariff policy in April, perhaps the most sensational reaction on the continent was triggered by the impact of the policy on Lesotho, a landlocked country in Southern Africa, crisscrossed by a network of rivers and mountain ranges. The US government imposed a 50 per cent tariff on imports from Lesotho, the highest tariff applied to any country bar China, ostensibly due to the trade deficit the US had with the country, where imports exceeded exports significantly.
With a population of 2.3 million people, Lesotho relies heavily on exports for its modest $2 billion gross domestic product (GDP). Lesotho’s trade surplus with the US is driven primarily by diamonds and textiles, notably Levi’s jeans. For instance, in 2024 alone, its exports to the US totalled $237 million, put at more than 10 per cent of its GDP.
Although the new move by the Trump administration threatens the African Growth and Opportunity Act (AGOA), African economies have been advised to define their own destinies and improve regional trade across the continent.
AGOA is a United States trade act that aims to assist sub-Saharan African economies and promote economic relations with the United States, providing eligible countries with duty-free access to the US market for over 1,800 products. Enacted in May 2000, it is currently in force until September 2025.
Mrs Okonjo-Iweala told reporters at the IMF/World Bank meetings that the Lesotho dilemma paints a grim picture of how poor African countries have performed in terms of trade and regional integration.
She explained: “Lesotho is exporting $200 million worth of textiles to the US, and we’re all lamenting (that) this market will be taken away. Guess what? Africa spent $7 billion importing textiles. So, why can’t Lesotho sell its textiles in the African markets?”
Moments of epiphany?
If there was perhaps no clarity about the need for Africa to integrate its trade and remove regional barriers to enhance easy flow of goods and humans across its borders before now, it appears the IMF/World Bank meetings and resolutions may have provided that important moment of epiphany for African policy makers.
Much of the discussions at the IMF and World Bank meetings were driven by uncertainty and the ripple effects of the trade tension. The multilateral organisations released key reports about the economic fallout from the US tariffs, especially for poor economies, all pointing in the direction of an uncertain future.
The IMF slashed growth forecasts for most countries in its World Economic Outlook but stopped short of predicting a global recession, saying, “Our new growth projections will include notable markdowns, but not recession.”
For sub-Saharan Africa, the IMF said the hard-won recovery has been overtaken by recent events and “the sudden shift in the global outlook has clouded the region’s short-term prospects and made policy even more challenging.”
Speaking on the sidelines of the IMF spring meetings, Wale Edun, Nigeria’s minister of finance, said Nigeria is focused on “crowding in the private sector and driving domestic revenue mobilisation” to stabilise the economy.
Mr Edun, for the umpteenth time, echoed reasons why mobilising domestic capital would help Nigeria reduce reliance on external funding and boost economic growth, increase revenue generation through tax reforms, asset optimisation, and streamline trade processes in the face of global trade tensions.
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In recent years, there have been efforts to ease trade across the region, such as the introduction of the African Continental Free Trade Area (AFCFTA). But the AfCFTA initiative, for instance, has faced several challenges too, including inadequate infrastructure, non-tariff barriers, inconsistent legal frameworks, informal trade, porosity of borders, fear of significant tariff revenue losses, and an uneven distribution of costs and benefits, among others.
Yet in the face of shrinking aid support and geo-political trade tensions, the continent will need to look inwards to address its developmental challenges, deepen trade integration, provide opportunities for its young population, build resilience against external shocks, and develop its economies.
President Bola Tinubu made reference to this urgent need last month in Ghana when he spoke during the launch of a series of events commemorating ECOWAS’ Golden Jubilee. Mr Tinubu, represented by Nigeria’s Minister of State for Foreign Affairs, Bianca Ojukwu, outlined a vision of ECOWAS as a “Community of People” rather than just a community of states.
The Nigerian President, who doubles as ECOWAS chair, urged ECOWAS nations to deepen economic cooperation and support intra-regional trade, emphasising that the African Continental Free Trade Area (AfCFTA) must serve as a catalyst for trade and regional transformation across the region.
On his part, Mr Adesina said the recent global tariff tensions underscore why Africa must reposition itself and deepen trade and regional economic integration. He noted that: “47 out of 54 African countries have been placed under higher US tariffs. The immediate direct effects of the tariffs on African countries will be a significant reduction in exports and foreign exchange availability. This will send other shock waves through African economies.
“Local currencies will weaken on the back of reduced foreign exchange earnings. Inflation will increase as costs of imported goods rise and currencies devalue against the US dollar. The cost of servicing debt as a share of government revenue will rise, as expected revenues decline.”
To build resilient economies, the AfDB president argued that “Africa must chart its future, relying not on the benevolence of others but on its own determination for self-reliance, building reliable alliances, leveraging opportunities in the global dynamics, while putting Africa first.
“Only then will Africa be great again!” he said.
