Bilateral exports between Africa and the Caribbean, regardless of their shared historical past, have by no means surpassed 6%, leaving a lot room for development of as much as $2.1 billion throughout the subsequent 5 years, in response to new research.
We’re dwelling in precarious occasions.
In an period marked by international financial uncertainty, geopolitical tensions, and fragmented provide chains, Africa and the Caribbean are at a essential juncture.
Most Caribbean nations now face a blanket 10% tariff on items exported to their largest buying and selling associate, america, which takes 40% of their whole exports. The so-called reciprocal tariffs on African nations vary from 10-50%, with Lesotho dealing with the only highest tariff of all US buying and selling companions, thereby nullifying preferences granted by means of the African Development and Alternative Act (AGOA).
These are actual challenges, particularly for smaller corporations which are having to adapt with little time and infrequently scarce sources. However there are additionally promising prospects on the horizon – if we dare to grab them.
Africa, for one, is now shifting into full, accelerated implementation of the African Continental Free Commerce Settlement (AfCFTA), arguably the largest resolution made by African Heads of Governments in six many years. This treaty has the facility not solely to revolutionize African commerce and growth but in addition to equip African nations with stronger negotiating energy in multilateral arenas, due to this fact boosting their collective capability to alter the phrases of worldwide commerce.
The Caribbean, with its smaller, distant, and import-dependent economies, is one area most susceptible to exterior shocks, whether or not from tariff escalations, local weather disasters, or provide chain disruptions. But it surely additionally has a singular alternative to spend money on long-term stability and financial development by diversifying exports and buying and selling companions, processing items earlier than export to retain extra worth, and strengthening regional and worldwide commerce ties.
Whereas many are taking a wait-and-see strategy on what this subsequent part of worldwide commerce will appear to be, for Africa and the Caribbean, that is an strategy that neither can afford. With the longstanding sociocultural historical past shared by the 2 areas, the time is ripe to forge deeper ties by means of mutually useful, trade-led financial development and growth, which is able to function a mannequin of South-South cooperation that can encourage others to observe of their footsteps.
Investing in interregional, value-added commerce
Regardless of efforts at regional integration, commerce between Africa and the Caribbean stays minimal. ITC information reveals that bilateral commerce has by no means exceeded 6% of whole exports for both area. African exports to the Caribbean have declined since 2014 and have been near 0.1% since 2020, whereas Caribbean exports to Africa stay risky, from simply 0.8% of whole exports in 2020 to 2.3% in 2022.
There’s room to develop, from the present $729 million in interregional commerce to probably $2.1 billion throughout the subsequent 5 years, if commerce obstacles are slashed and investments are made in key sectors.
A formalised commerce hall may cut back regulatory divergence and non-tariff obstacles. For example, Caribbean rum exporters at the moment face an 88% tariff when promoting to African markets – a major barrier to development.
However eradicating or reducing commerce obstacles alone will not be sufficient.
Entry to commerce and Funding finance is significant for tapping into the key untapped development potential in commerce in value-added items. That is essential for precedence sectors like minerals and metals, processed meals and animal feed, manufactured merchandise, journey, transport, and inventive industries, the place the areas have comparative benefits and synergies are doable. Commerce between the areas at the moment depends closely on unprocessed commodities, which displays missed alternatives for industrial collaboration, innovation, and financial diversification.
Afreximbank’s presence within the area, by means of its Barbados workplace established about two years in the past, will considerably enhance commerce between the 2 areas. That is additional strengthened by the continued undertaking to create the Afreximbank African Commerce Centre (AATC), and the initiative to arrange the CARICOM Eximbank – an Afreximbank subsidiary. Moreover, the CARICOM Fee and Settlement System (CAPSS), being developed by Afreximbank and CARICOM central banks, will deepen and enhance the effectivity of intra-CARICOM funds in nationwide currencies. By its integration with the Pan-African Fee and Settlement System (PAPSS), CAPSS will speed up the mixing of monetary methods of the 2 areas whereas boosting Africa-Caribbean commerce and investments.
Within the fast-growing inventive economic system, as an example, each areas have already got longstanding traditions in textiles, ceramics, and woodwork, and might construct on their shared cultural heritage. The collaboration between African and Caribbean designers, musicians, and artists additionally presents important potential for development.
Afreximbank’s Inventive Africa Nexus (CANEX) has highlighted vogue, design, and crafts as a precedence worth chain, and has doubled programme funding from $1 billion to $2 billion for the subsequent three years, geared toward offering infrastructure, financing, and sources to scale Africa and diasporic inventive industries globally. The Financial institution can be creating a $500 million personal fairness movie fund to assist African filmmakers. These efforts replicate the dimensions of ambition required to remodel the inventive industries into international development engines.
Breaking bottlenecks
To benefit from these financial development alternatives, foundations should be laid. The most important hurdles in enhancing Africa-Caribbean commerce embrace weak institutional frameworks, logistical inefficiencies, and infrastructural gaps. Regardless of their geographic proximity – simply 1,600 miles aside – the dearth of direct transport hyperlinks and weak regulatory frameworks make commerce between the 2 areas cumbersome.
Logistics, sadly, stays a significant bottleneck. ITC information present that 57% of unrealized commerce potential stem from logistical challenges. Each areas rating poorly on the logistics index, in response to the World Financial institution, rating among the many lowest on the planet by way of transport effectivity. Investing in interregional infrastructure can be key, together with direct maritime and air transport hyperlinks, bettering ports, and enhancing digital infrastructure.
For instance, the Afreximbank has an ongoing $3 billion credit score facility for CARICOM nations to spice up commerce infrastructure and the competitiveness of small companies. These are the forms of preparations, when replicated, that make a distinction in the long run.
Empowering small companies to grab the second
However all of this might be for naught until small companies within the area are empowered to behave and seize these alternatives for themselves. The Strengthening AfriCaribbean Commerce and Funding Mission, an initiative spearheaded by Afreximbank and the ITC, is forging very important hyperlinks between the personal sectors of Africa and the Caribbean. This formidable endeavour goals to domesticate not solely strategic industrial partnerships but in addition cultural connections. In collaboration with the Caribbean Personal Sector Group and the African Enterprise Council, the undertaking empowers each areas to determine enterprise alternatives and stimulate business-to-business exchanges, paving the way in which for a dynamic synergy to raise the financial panorama of each Africa and the Caribbean.
Small companies are the spine of the African and Caribbean economies, however stay underrepresented in commerce. The primary-ever World Small and Medium-sized Enterprises Ministerial Assembly was hosted by ITC and the Authorities of South Africa in Johannesburg from 22-24 July 2025, forward of South Africa’s G20 presidency. The assembly positioned small companies as key gamers in international commerce reform. Afreximbank enabled the participation of 15 ministers on the assembly; 10 from Africa and 5 from the Caribbean.
The AfriCaribbean Commerce and Funding Discussion board (ACTIF) kicks off in St. George’s Grenada from 28 to 30 July 2025, the place the work to extend commerce and funding between the 2 areas will proceed. To take part, please go to actif2025.com.
Our alliance is greater than only a response to international uncertainty; it’s a blueprint for inclusive, resilient, and opportunity-driven commerce within the twenty first century. Collectively, Africa and the Caribbean can showcase South-South commerce as an answer in a time of nice change.
Written by Pamela Coke-Hamilton, Government Director, Worldwide Commerce Centre and Benedict Oramah, President and Chairman, Afreximbank
