<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="466" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/TPOGIITDYZID5PWPHKLOH2IPDI.avif" alt="" class="wp-image-605310"/><figcaption class="wp-element-caption">South African Rand coins are seen in this illustration picture taken November 5, 2020. REUTERS/Mike Hutchings/Illustration/File Photo</figcaption></figure>



JOHANNESBURG, April 3 (Reuters) &#8211; South African assets remained under pressure on Thursday after being hit by a double-whammy of U.S. President Donald Trump&#8217;s announcement of new and higher tariffs and a contentious budget vote that has threatened the ruling coalition&#8217;s future.



The risk-sensitive rand&nbsp;ZAR=D3&nbsp;traded at 18.80 against the dollar by 1412 GMT, hovering near a three-month low. It hit 19.0150 per dollar earlier in the day, its weakest level since mid-January.



On Wednesday, Trump announced a 10% baseline tariff on all imports to the United States, and higher duties on dozens of countries, including South Africa, which was hit with a 31% rate.



Trump said the tariffs were a response to duties and other non-tariff barriers put on U.S. goods.



South Africa&#8217;s presidency said it urgently wanted a new trade deal with the United States.



Major South African exports to the U.S. include vehicles and auto parts, precious stones and metals, iron and steel, machinery and aluminium products and citrus.



&#8220;While SA will look to enhance other trading partners, Pretoria’s response also requires long overdue domestic economic policy changes to kickstart growth,&#8221; Daniel Silke, director of the Political Futures Consultancy, said in a post on X.



South Africa&#8217;s parliament passed the budget&#8217;s fiscal framework on Wednesday after weeks of political wrangling, but the second-biggest party in the coalition, the pro-business Democratic Alliance (DA), voted against the measure and on Thursday challenged the outcome in court.



The rand gradually weakened over the course of the day on Wednesday as market fears grew that the alliance may potentially exit the coalition, and went into freefall after the tariff announcement. It slipped as much as 2.6% against the dollar.



On the Johannesburg stock market, the Top-40&nbsp;.JTOPI&nbsp;index was last down about 3.5%.



(Editing by Christian Schmollinger and Tomasz Janowski)

TPOGIITDYZID5PWPHKLOH2IPDI

South African markets hit by double whammy of tariffs and shaky coalition

Why The New NCAA Rules Are Hurting March Madness

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="470" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/VWJ6NSIHSRLL7HATPZ6FTRKWKQ.avif" alt="" class="wp-image-605292"/><figcaption class="wp-element-caption">Factory workers walk home after work outside the capital Maseru in Lesotho, October 6, 2022.REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



April 3 (Reuters) &#8211; The tiny southern African kingdom of Lesotho has been hit with a 50% reciprocal trade tariff by U.S. President Donald Trump, the highest levy of any single state on his long list of target economies.



Lesotho, which Trump had ridiculed in March as a country &#8220;nobody has ever heard of&#8221;, is a poor and landlocked country with a gross domestic product of just over $2 billion.



It has a large trade surplus with the United States, mostly made up of diamonds and textiles, including Levi&#8217;s jeans.



Its exports to the United States, which in 2024 totalled $237 million, account for more than 10% of GDP, Oxford Economics said.



Trump on Wednesday imposed sweeping new reciprocal tariffs on global trading partners, upending decades of rules-based trade and threatening cost increases for consumers.



Trump said the &#8220;reciprocal&#8221; tariffs were a response to duties and other non-tariff barriers put on U.S. goods. Lesotho charges 99% tariffs on American goods, according to the U.S. administration.



In Africa, the move signalled the end of the AGOA (African Growth and Opportunity Act) trade deal that was supposed to help African economies develop through preferential access to U.S. markets, trade experts said.



It also compounded the pain after Trump&#8217;s administration dismantled USAID, the government agency that was a major supplier of aid to the continent.



The government of Lesotho, a mountainous nation of about 2 million people that is encircled by South Africa, had no immediate comment on the trade tariffs on Thursday.



But its foreign minister told Reuters last month the country, which has one of the highest HIV/AIDS infection rates in the world, was feeling the impact of the aid cuts as the health sector had been reliant on them.



The formula used to calculate the U.S. tariffs took the U.S. trade deficit in goods with each country as a proxy for alleged unfair practices, then divided it by the amount of goods imported into the United States from that country.



The resulting tariff equals half the ratio between the two, meaning countries such as Lesotho and Madagascar, which import only small quantities of U.S. goods, have been hit with more punitive tariffs than much richer countries.



(Writing by Silvia Aloisi; Editing by Hugh Lawson)

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Trump slaps tiny African kingdom of Lesotho with highest tariff of all

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="466" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/3WSFZQUN4BJ6PAU7VYVJ5KCG2Y.avif" alt="" class="wp-image-605289"/><figcaption class="wp-element-caption">South African opposition Democratic Alliance leader Helen Zille arrives to cast her vote in Rondebosch, Cape Town, May 7, 2014. REUTERS/Sumaya Hisham/File Photo</figcaption></figure>



JOHANNESBURG, April 3 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s pro-business Democratic Alliance party filed a court case challenging the legality of the budget process on Thursday and sought to block the implementation of a value-added tax increase, widening a rift in the fragile ruling coalition.



South Africa&#8217;s National Assembly narrowly passed the budget&#8217;s fiscal framework and revenue proposals on Wednesday, with the biggest party in the coalition government, the African National Congress, securing support from smaller partners and parties outside the coalition.



The DA, which is the second biggest party in the coalition, voted against the legislation, saying the adoption by a parliamentary committee of a report supporting the fiscal framework was procedurally flawed.



It also opposed a proposal in the budget to raise VAT by 1 percentage point spread over two years, arguing it would hit the poorest hard.



Market fears have grown that the DA may quit the multi-party government, which was formed last year after the ANC lost its parliamentary majority for the first time since the end of apartheid in 1994.



The DA is expected to make a decision on its continued participation in government in the coming days.



Helen Zille, chairperson of the DA&#8217;s federal council, said the party was seeking an interdict to stop South Africa&#8217;s tax service from implementing the 0.5% increase to VAT on May 1.



&#8220;This interdict request is based on our legal challenge to suspend the finance minister&#8217;s announcement of the VAT hike and overturning Parliament&#8217;s adoption of the Fiscal Framework,&#8221; she said.



(Reporting by Sfundo Parakozov; Editing by Bhargav Acharya and Alex Richardson)

3WSFZQUN4BJ6PAU7VYVJ5KCG2Y

South Africa’s DA challenges legality of budget process in court

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="540" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/32X5ULKWXNJB5GWQB3E5EDY5UQ.avif" alt="" class="wp-image-605286"/><figcaption class="wp-element-caption">The new logo of the Nigeria oil company is seen at the NNPC Mega Gas Station in Abuja, Nigeria August 30, 2022. REUTERS/Afolabi Sotunde/File Photo</figcaption></figure>



LAGOS, April 3 (Reuters) &#8211; Nigeria&#8217;s President Bola Tinubu has appointed ex-Shell executive Bayo Ojulari and a new board to run the Nigerian National Petroleum Company, raising hopes of a much-needed overhaul at the troubled state-owned firm and a boost in oil production.



Long serving as Nigeria&#8217;s golden goose, NNPC&#8217;s opaque dealings, corruption and high-level political meddling have crippled its finances in recent years, creating challenges the new leadership must tackle if they are to get the company &#8211; and the nation&#8217;s economy &#8211; back on track.



Here is what to know about NNPC&#8217;s operations.



WHY DOES NNPC MATTER?



Nigeria&#8217;s economy is dependent on oil, which accounts for 90% of exports and typically half of the revenues that fund its national budget, making NNPC&#8217;s performance critical to the economic well-being of Africa&#8217;s most populous nation.



&#8220;No Nigerian president can succeed in moving the needle of the economy without addressing the long hydra-headed issues that have made the state oil company a cesspit of malfeasance for decades,&#8221; said Abuja-based energy analyst Kelvin Emmanuel.



Nigeria produces around 1.75 million barrels of oil per day mostly through NNPC&#8217;s joint ventures with international partners Shell, ExxonMobil, TotalEnergies, Chevron and Eni.



NNPC, which is also Nigeria&#8217;s largest importer of refined fuels, said last year that it had $161 billion in assets.



RESTRUCTURING NNPC



One of the biggest tasks for Ojulari, a 24-year industry veteran, will be to restructure NNPC to become more efficient, analysts said.



That could involve cutting its workforce of over 5,700 employees and selling off some of NNPC&#8217;s sprawling assets, which include petrol stations and troubled refineries, in order to concentrate on oil production.



Any large-scale changes, however, could face pushback from powerful politicians, who influence appointments at NNPC and benefit from the company&#8217;s contracts, the analysts said.



Jeremiah Enoch, an associate at consultancy firm J.S. Held, said Ojulari would also have to carefully navigate &#8220;the persistent issue of ethnic politics within the organisation,&#8221; referring to how ethnic identity can make or break careers in Nigeria.



TRANSPARENCY



NNPC has long been accused of lacking transparency. It only started publishing financial results in 2021 after four decades of operations.



Last September, after months of denials, it finally admitted it was facing financial strain and owed $6 billion to gasoline suppliers.



NNPC has also not disclosed how much of its future crude revenues are earmarked for loan repayments, though local media report the figure could run into the billions of dollars.



Clementine Wallop, director for Sub-Saharan Africa at political risk consultancy Horizon Engage, said Ojulari faces a tough challenge to sustain recent production gains that many hope will underpin Nigeria&#8217;s economic recovery.



&#8220;He will need all his skills to tackle some serious challenges at NNPC, which has had a rocky time financially in the last year,&#8221; she said.



Restructuring and transparency would also help ready NNPC for a planned initial public offering, which could come in the next 12 to 15 months and provide a useful injection of fresh capital, a senior company official said.



($1 = 1,532.3800 naira)



(Reporting by MacDonald Dzirutwe in Lagos, Ben Ezeamalu in London and Ope Adetayo in Abuja, editing by Joe Bavier)

32X5ULKWXNJB5GWQB3E5EDY5UQ

EXPLAINER-What to know as a new CEO takes over at Nigeria’s state oil firm NNPC

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="960" height="640" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/C765ORI3WFKWTHKDVZMO7IDY6Y.avif" alt="" class="wp-image-605266"/><figcaption class="wp-element-caption">U.S. President Joe Biden speaks with Lobito Atlantic Railway (LAR) Chief Operating Officer Nicolas Gregoir, during a visit to Lobito Port Terminal to receive a briefing on the Lobito Atlantic Railway, in Lobito, Angola, December 4, 2024. REUTERS/Elizabeth Frantz</figcaption></figure>



LUANDA, April 3 (Reuters)&nbsp;&#8211;&nbsp;The United States remains committed to funding the Lobito rail corridor, a project to help transport critical minerals from the central African copperbelt to the West, despite President Donald Trump&#8217;s aggressive&nbsp;spending cuts, a U.S. diplomat said.



The U.S, through its International Development Finance Corporation, set up during Trump&#8217;s first term in 2019, has pledged a $550 million loan to support Lobito, which is considered key in countering Chinese control over copper and cobalt supplies in the region.



Trump&#8217;s spending cuts had raised concerns for projects such as Lobito which has plans for Angola, Democratic Republic of Congo and Zambia. But the U.S. Ambassador to Angola, James Story, sought to allay fears on Wednesday.



Story was accompanied by European diplomats, Angolan officials and executives from Lobito Atlantic Railways on a tour of projects in Angola.



Asked if funding for the Lobito corridor was at risk, Story said: &#8220;Not at the moment. All the projects with the DFC and also with the Exim Bank are there and we&#8217;re working on them.&#8221;



&#8220;Various organisations say that we&#8217;re moving away from this project, but that&#8217;s not true,&#8221; Story said.



In 2022, Angola handed a 30-year Lobito corridor concession to the Lobito Atlantic Railway consortium joint-venture led by commodities firm Trafigura, construction giant Mota-Engil and independent rail operator Vecturis SA.



The first phase of the venture involves refurbishing an existing 1,300 km (800 mile) railway through Angola and extending it into the Democratic Republic of Congo&#8217;s mining heartland, to facilitate exports of copper and cobalt through the Atlantic coast.



A second phase currently under feasibility study would link Zambia &#8211; Africa&#8217;s second largest copper producer after the DRC &#8211; to Lobito.



Lobito Atlantic Railways CEO Francisco Franca, who was part of the tour, said DFC financing contracts were &#8220;currently in the final stages&#8221;.



&#8220;In two or three months&#8217; time, we expect to have the contracts signed and then the normal international financing procedures will follow,&#8221; Franca said.



Rosário Bento, the EU ambassador in Angola who also took part in the visit, said Western governments including the U.S remained committed to the Lobito corridor project.



&#8220;The United States has an interest in the region and is already receiving shipments of raw materials that pass through the Lobito corridor,&#8221; she said. &#8220;I don&#8217;t see the United States being disinterested in something they are already benefiting from.&#8221;



(Reporting by Miguel Gomes; Writing by Nelson Banya; Editing by Olivia Kumwenda-Mtambo and Andrew Heavens)

C765ORI3WFKWTHKDVZMO7IDY6Y

US committed to funding Angola’s Lobito rail corridor despite spending cuts, diplomat says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/I626AAIJRJP7DJDRYXCYV56KLA.avif" alt="" class="wp-image-605247"/><figcaption class="wp-element-caption">The Hillbrow Tower, an iconic tower used to identify the Johannesburg skyline, is seen as the sun rises, in Johannesburg, South Africa, June 20, 2019. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



JOHANNESBURG/ANTANANARIVO, April 3 (Reuters) &#8211; The U.S. government&#8217;s imposition of steep tariffs on African nations signals the end of the AGOA trade deal that was supposed to help African economies develop through preferential access to U.S. markets, trade experts said on Thursday.



Several African countries were hit by some of the highest tariffs announced by U.S. President Donald Trump on Wednesday, including levies of 50% on goods from Lesotho, 47% for Madagascar, 40% for Mauritius, 37% for Botswana and 30% for South Africa, the continent&#8217;s biggest exporter to the U.S.



Many of the hardest-hit countries are already struggling with very high levels of poverty and debt as well as, in some cases, other severe challenges such as food shortages or cyclones in Madagascar, and one of the world&#8217;s highest rates of HIV/AIDS infections in Lesotho.



The tariffs also compound the pain for Africa after Trump&#8217;s administration dismantled USAID, the government agency that was a major supplier of aid to the continent, and specifically cut bilateral aid to South Africa.



The AGOA trade accord is due to expire in September, and the raft of tariffs suggests that a renewal of the deal, a major part of U.S. policy towards the continent since the 1990s era of President Bill Clinton, is extremely unlikely.



&#8220;The reciprocal trade announcement policy will pull the AGOA rug from under our feet. That will be gone. It will replace AGOA, you don&#8217;t have to wait for September. It&#8217;ll be gone before then,&#8221; said economist Adrian Saville, a professor at South Africa&#8217;s Gordon Institute of Business Science.



It was unclear whether AGOA tariff exemptions on certain goods would continue to be applied between now and September in the wake of Trump&#8217;s tariff barrage.



&#8220;There is no indication that imports under AGOA are exempt from the 10% tariffs, so it appears that effectively immediately AGOA imports that previously were duty-free are now subject to a 10% duty,&#8221; the Washington-based African Coalition for Trade said&nbsp;in a memo to members on Thursday.



&#8220;This is obviously not a positive sign for the outlook for renewal of AGOA.&#8221;



However, the permanent secretary at Kenya&#8217;s foreign ministry, Korir Sing&#8217;Oei, said his understanding was that tariff exemptions under AGOA would remain valid until the act&#8217;s expiry.



FRESH BLOW FOR SOUTH AFRICA



In South Africa, whose second largest trading partner is the U.S., after China, the government struck a hopeful note despite the blow.



&#8220;The tariffs affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the U.S., as an essential step to secure long-term trade certainty,&#8221; the presidency said in a statement.



But a new trade deal with Washington looks like a mountain to climb for Pretoria.



Trump has repeatedly lambasted South Africa, the country that overcame apartheid, over what he described as discriminatory policies against white people.



U.S.-South African relations have soured since Trump cut U.S. financial aid to the country, citing disapproval of its land policy and its genocide case at the International Court of Justice against Washington&#8217;s ally Israel.



Trump&#8217;s latest tariffs are in addition to the 25% imposed on all vehicles and car parts imported into the U.S., which will kick in from Thursday.



South Africa&#8217;s exports of vehicles and parts into the U.S. are estimated at over $2 billion and could be hit hard by the levies.



Speaking at an investment conference in Johannesburg, South African Trade Minister Parks Tau said the current global economic uncertainty was affecting demand for South Africa&#8217;s products and its ability to create jobs.



&#8220;If there is one message that we must convey today, it is that diversifying trade relationships is absolutely critical.&#8221;



In 2024, U.S. imports from South Africa totalled $14.7 billion, up 4.9% from 2023, according to the Office of the United States Trade Representative.



Major South African exports to the U.S. include precious stones and metals, motor vehicle parts and accessories, iron and steel, machinery and aluminium products.



Lesotho, a tiny landlocked country surrounded by South Africa, is the second largest exporter of textiles and garments to the U.S. under AGOA. In 2024 it exported goods worth $237 million into the U.S., a 4.7% increase over 2023.



(Reporting by Nqobile Dludla, Olivia Kumwenda-Mtambo and Catherine Schenck in Johannesburg, Aaron Ross in Nairobi and Lovasoa Rabary in Antananarivo; Writing by Bhargav Acharya and Estelle Shirbon; Editing by Mark Heinrich)

I626AAIJRJP7DJDRYXCYV56KLA

Steep US tariffs on Africa signal end of trade deal meant to boost development

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="5000" height="3334" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/02/W6G6MVOXZ5MAPCA7IMBJFSHWMM.avif" alt="" class="wp-image-585151"/><figcaption class="wp-element-caption">U.S. President Donald Trump holds a joint press conference with Japanese Prime Minister Shigeru Ishiba in the East Room at the White House in Washington, U.S., February 7, 2025. REUTERS/Kent Nishimura/File Photo</figcaption></figure>



ORANIA, South Africa, April 3 (Reuters)&nbsp;&#8211;&nbsp;A group of white Afrikaners was so opposed to majority Black rule when apartheid ended some three decades ago that they carved out a separatist enclave, the only town in South Africa where all residents, including menial workers, are white.



Now, the residents of Orania &#8211; population, 3,000 &#8211; in the semi-arid Karoo region want U.S. President Donald Trump to help them become a state.



Last week, community leaders from Orania visited the United States seeking recognition as an autonomous entity. South African authorities acknowledge it as a town that can raise local taxes and deliver services.



&#8220;We wanted to&#8230; gain recognition, with the American focus on South Africa now,&#8221; Orania Movement leader Joost Strydom told Reuters, on a hill strewn with bronzes of past Afrikaner leaders, including from the era of&nbsp;racist white minority rule that was ended by internal resistance and international outrage.



The 8,000-hectare settlement is riding an unprecedented wave of support from right-wing Americans for Afrikaner nationalists, who irrevocably lost power when apartheid ended in 1994 and Nelson Mandela became South Africa&#8217;s first Black president.



In New York and Washington the Orania leaders met influencers, think-tanks and low-ranking Republican politicians.



&#8220;We told them South Africa is such a &#8230; diverse country that it&#8217;s not a good idea to try and manage it centrally,&#8221; said Strydom.



Three senior Orania officials interviewed by Reuters were vague about the help they sought in the U.S. They said they were not seeking handouts but wanted investment to build houses to keep up with its 15% population growth, infrastructure and energy independence that it has almost half-achieved with solar.



Strydom declined to say whether his delegation had contact with the Trump administration. The U.S. State Department did not immediately respond to a request for comment.



South African foreign ministry spokesperson Chrispin Phiri told Reuters: &#8220;(Orania&#8217;s) not&#8230; a country. They are subject to the laws of South Africa and &#8230; our constitution.&#8221;



Other Afrikaner nationalist groups have also visited the U.S. to build alliances with overwhelmingly white, Republican audiences, prompting accusations back home that such trips stoke racial tensions.



The leftist Economic Freedom Fighters (EFF) last week accused Orania&#8217;s leaders of &#8220;destroying the unity of this country&#8221;, a charge they reject.



<h2 class="wp-block-heading" id="h-start-of-something">&#8216;START OF SOMETHING&#8217;</h2>



Afrikaners are descendants of Dutch settlers who began arriving in the 1600s. They resisted the British Empire in South Africa,&nbsp;but once in charge of the country, they hardened racial segregation using discriminatory laws.



&#8220;There were 17,000 laws on land alone,&#8221; foreign ministry spokesperson Phiri said.&#8221;We had&#8230; to reconstruct South Africa into a country that represents all those who live in it.&#8221;



In 1991, as the end of apartheid neared, a group of about 300 Afrikaners acquired Orania, previously an abandoned water project on the muddy Orange River, to create a homeland exclusively for white Afrikaners.



&#8220;It&#8217;s the start of something,&#8221; former Orania Movement leader Carel Boshoff, said of his community, comparing its desire for independence &#8211; Orania even uses its own informal currency &#8211; to that of Israel, established after World War Two despite&nbsp;stiff resistance from Arabs living in that territory.



Boshoff, whose father founded the town and whose grandfather, Hendrick Verwoerd,&nbsp;is widely viewed as the architect of apartheid, dreams of a territory stretching to the west coast nearly 1,000 miles away.



Orania&#8217;s activities are funded through local taxes and donations from supporters and residents.



Its leaders were dismayed to find the only solution that anyone in the United States was interested in discussing was U.S. residency, after Trump offered in February to resettle white South African farmers and their families as refugees.



&#8220;We can&#8217;t be exporting our people,&#8221; Boshoff told Reuters beside a framed photo of his late grandfather. &#8220;We told them &#8230; &#8216;help us here&#8217;,&#8221; he said.



Some U.S. right-wingers have sought to make common cause with Afrikaners in their opposition to diversity policies that aim to empower historically unjustly-treated non-white groups. South Africa&#8217;s Black empowerment laws have been ridiculed by Trump&#8217;s South African-born adviser, Elon Musk.



Those laws were the reason Hanlie Pieters moved to Orania eight months ago, after 25 years of living in Johannesburg, to become head of marketing for the town&#8217;s technical college.



&#8220;Our children &#8230; what opportunities&nbsp;will&nbsp;they have?&#8221; Pieters said, bemoaning quotas for Black workers, while trainee plumbers and electricians honed their skills in a shed nearby.



A third of all South Africans are out of work, most of them poor Blacks.



One such unemployed man, 49-year-old Bongani Zitha, said he thought &#8220;people in Orania&#8230; are doing very well&#8221; compared to many South Africans. &#8220;So many people looking for opportunities. It&#8217;s a struggle,&#8221; he sighed.



Zitha, who has lived in a corrugated shanty town in Soweto with no piped water or sewage since 1995, said at least the people of Orania have &#8220;rights to health, education, everything&#8221;.



And unlike himself under white minority rule, he added, Orania residents are free to live wherever they want.



(Reporting by Tim Cocks; Editing by Gareth Jones)

W6G6MVOXZ5MAPCA7IMBJFSHWMM

South Africa’s white Afrikaner separatists want Trump’s help to become state

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-820x547.jpg" alt="" class="wp-image-506008" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1604532787-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Ugandan shilling and US dollars in the draw at a foreign exchange currency bureau in Kampala, Uganda, on Wednesday, Aug. 16, 2023. Uganda&#8217;s central bank said it stands ready to act if the World Bank&#8217;s decision to halt new funding over the country&#8217;s passage of anti-LGBTQ legislation impacts the currency further. Photographer: Luke Dray/Bloomberg via Getty Images</figcaption></figure>



KAMPALA, April 3 (Reuters) &#8211; The Ugandan shilling was little-changed on Thursday and was expected to strengthen due to increased dollar inflows from coffee and gold exports, traders said.



At 0908 GMT, commercial banks quoted the shilling at 3,639/3,649, compared with Wednesday&#8217;s close of 3,642/3,652.



(Reporting by Elias Biryabarema; Editing by George Obulutsa)

Ugandan Economy Following Rate Cut

Ugandan shilling steady, to gain ground due to gold export FX inflows

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="487" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/rand2-1.jpg" alt="" class="wp-image-568119" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/rand2-1.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/rand2-1-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/rand2-1-135x90.jpg 135w" sizes="auto, (max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, File. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, April 3 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand was hovering near a three-month low on Thursday after being hit by a double-whammy of U.S. President Donald Trump&#8217;s announcement of new and higher tariffs and the passing of a contentious budget vote that has threatened the ruling coalition&#8217;s future.



At 0811 GMT, the rand traded at 18.90 against the dollar, not far from its previous close. It hit 19.0150 per dollar earlier in the day, its weakest since mid-January.



On Wednesday, Trump announced a 10% baseline tariff on all imports to the United States, and higher duties on dozens of countries, including South Africa, which was hit with a 30% rate.



Trump said the tariffs were a response to duties and other non-tariff barriers put on U.S. goods.



South Africa&#8217;s parliament had earlier passed the budget&#8217;s fiscal framework on Wednesday after weeks of political wrangling, but the second-biggest party in the coalition, the pro-business Democratic Alliance (DA), voted against the measure and said it would challenge the outcome in court.



The rand gradually weakened over the course of the day on Wednesday as markets fears grew that the DA may potentially exit the coalition, and went into freefall after the tariff announcement. It slipped as much as 2.6% against the dollar.



On the stock market, the Top-40 index was down about 2.5%.



South Africa&#8217;s benchmark 2030 government bond was weaker in early deals, with the yield up 7.5 basis points to 9.39%.



(Reporting by Sfundo Parakozov and Bhargav Acharya; Editing by Christian Schmollinger)

rand2 (1)

South African rand hit by double whammy of tariffs and shaky coalition

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="513" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/CPPMFTYQRZPC7D52YECMETYGTA.avif" alt="" class="wp-image-605165"/><figcaption class="wp-element-caption">Trucks deliver containers to be loaded onto a ship at the port in Durban, South Africa, January 31, 2024. REUTERS/Rogan Ward/File Photo</figcaption></figure>



JOHANNESBURG, April 3 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s presidency said on Thursday that the new U.S. tariffs underscore the need to negotiate a new bilateral trade deal with Washington to ensure long-term trade certainty.



U.S. President Donald Trump unveiled global reciprocal tariffs on most goods imported to the United States on Wednesday.



Trump imposed a 30% rate on South Africa.



&#8220;The tariffs affirm the urgency to negotiate a new bilateral and mutually beneficial trade agreement with the U.S., as an essential step to secure long-term trade certainty,&#8221; the Presidency said in a statement.



The latest tariffs are in addition to the 25% imposed on all vehicles and car parts imported into the U.S., which will kick in from Thursday.



South Africa&#8217;s exports of vehicles and parts into the United States are estimated at over $2 billion and could be hard hit by the levies.



&#8220;Whilst South Africa remains committed to a mutually beneficial trade relationship with the United States, unilaterally imposed and punitive tariffs are a concern and serve as a barrier to trade and shared prosperity,&#8221; the President&#8217;s office added.



(Reporting by Nqobile Dludla; Editing by Olivia Kumwenda-Mtmabo and Sharon Singleton)

CPPMFTYQRZPC7D52YECMETYGTA

South Africa seeks new US trade deal after tariff hike, says presidency

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="521" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/2PLENK7UEVP6LHO27XU5VACMUU.avif" alt="" class="wp-image-605162"/><figcaption class="wp-element-caption">South African Rand coins are seen in this illustration picture taken October 30, 2020. REUTERS/Mike Hutchings/Illustration/File Photo</figcaption></figure>



JOHANNESBURG, April 2 (Reuters)&nbsp;&#8211;&nbsp;The South African rand dropped sharply on Wednesday as a fractious budget vote threw into doubt the solidity of the coalition government.



At 1640 GMT, the rand traded at 18.7725 against the dollar&nbsp;ZAR=D3, about 1.4% weaker than Tuesday&#8217;s closing level.



While the budget&#8217;s fiscal framework and revenue proposals passed in Parliament, the second-biggest party in the coalition, the pro-business Democratic Alliance, voted against them and said it would challenge the outcome in court.



Finance Minister Enoch Godongwana said he did not think a party could vote against a budget and then be part of its implementation.



&#8220;The clear divide between the ANC and DA puts the state of the Government of National Unity in question,&#8221; said Shaun Murison, a senior market analyst at IG.



The African National Congress, the biggest party in the coalition, secured the backing of an assortment of smaller coalition partners and parties outside the coalition to get the legislation passed.



The Johannesburg Stock Exchange&#8217;s Top-40 index&nbsp;.JTOPI&nbsp;closed down 0.9% while the yield on the benchmark 2030 government bond&nbsp;ZAR2030=&nbsp;rose 21 basis points to 9.315%.



(Reporting by Sfundo Parakozov; Editing by Alexander Winning and Hugh Lawson)

2PLENK7UEVP6LHO27XU5VACMUU

South African rand slides as budget vote puts coalition on shaky ground

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="720" height="480" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/IA4F5V5BOBKMZGXUYZUHEWQQVQ.avif" alt="" class="wp-image-605143"/><figcaption class="wp-element-caption">The World Bank logo is seen at the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington, U.S., April 13, 2023. REUTERS/Elizabeth Frantz/File Photo</figcaption></figure>



LONDON, April 3 (Reuters)&nbsp;&#8211;&nbsp;The World Bank&#8217;s private investment arm is backing the rush into digital data in Africa with a $100 million investment in regional data centre developer and operator Raxio Group, funding centres from Ethiopia to Angola.



Digital demand on the continent is surging, but infrastructure remains scarce. Africa accounts for less than 1% of the world&#8217;s data centre capacity even as mobile data usage grows by around 40% annually &#8211; nearly double the global average, according to U.S. advocacy group Internet Society.



The debt funding by the World Bank&#8217;s International Finance Corporation (IFC) &#8211; its largest such investment to date in Africa &#8211; reflects rising interest from global institutions in the continent&#8217;s digital economy, where mobile money, AI-driven services and cloud-based platforms are rapidly expanding. Hosting data locally reduces costs, improves speeds and gives governments more control over cybersecurity and regulation.



&#8220;Data centres as such and overall digital connectivity is an important area of focus for the IFC,&#8221; said Sarvesh Suri, IFC regional industry director, infrastructure and natural resources in Africa.



Improving digital connectivity and building the backbones of digital infrastructure are of key importance to support economic growth in Africa, Suri added.



After launching its first facility in Uganda in 2021, Raxio is building a network of top standard data centres, including one in Ivory Coast with construction underway in Mozambique, Ethiopia and Democratic Republic of Congo.



The expansion comes as global tech giants and infrastructure investors view Africa as the next battleground for cloud services. Cloud computing and tech giants such as Amazon Web Services AMZN.O, Microsoft Azure MSFT.O and Huawei are ramping up partnerships and presence on the continent, but many still rely on Europe or South Africa for hosting.



&#8220;We see the interest, the support, the engagement, the collaboration we are getting from the governments where we operate, who really want this to happen,&#8221; said Raxio Group CEO Robert Skjodt.



Building data centres in frontier markets isn&#8217;t without risk. Unreliable power supply, complex regulation and political instability can deter commercial players.



Development finance institutions play a crucial role by de-risking early investments that can unlock long-term private capital, said Suri.



&#8220;We bring in the right kind of instruments to help support investors to reduce the risk over all this, to make sure that these investments continue to be long-term, sustainable, and profitable, but also economically beneficial for the countries,&#8221; said Suri.



(Reporting by Colleen Goko; Editing by Karin Strohecker)

IA4F5V5BOBKMZGXUYZUHEWQQVQ

World Bank backs Africa digital data push with $100 million Raxio deal

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs-820x462.png" alt="" class="wp-image-605140" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs-820x462.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs.png 1480w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., on April 2, 2025. Leah Millis | Reuters</figcaption></figure>



President Donald Trump on Wednesday laid out the U.S. “reciprocal tariff” rates that more than 180 countries and territories, including European Union members, will face under his sweeping new trade policy.



Trump and the White House shared a series of charts on social media detailing the tariff rates they say other countries impose on the U.S. Those purported rates include the countries’ “Currency Manipulation and Trade Barriers.”



An adjacent column shows the new U.S. tariff rates on each country, as well as the European Union.



Those rates are, in most cases, roughly half of what the Trump administration claims each country has “charged” the U.S.



The reciprocal rates are not necessarily the only U.S. tariffs these countries will face.



The White House told CNBC’s Eamon Javers on Wednesday that the new reciprocal rate on China will be added to existing tariffs totaling 20%, meaning the true tariff rate on Beijing&nbsp;under this Trump term&nbsp;is 54%.



Trump said his plan will set a 10% baseline tariff across the board. But as his charts make clear, many countries are set to face significantly higher rates.



“We will charge them approximately half of what they are and have been charging us,” Trump said in an announcement in the Rose Garden at the White House.



“So, the tariffs will be not a full reciprocal,” he said.



But that halved figure includes “the combined rate of all their tariffs, nonmonetary barriers and other forms of cheating,” he said.



See all the new rates here:



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125354-1743628618479-image.png?v=1743628691&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: Donald Trump via Truth Social



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125386-1743629783277-b4fc0291ac1ed15f.jpg?v=1743629815&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: U.S. President Donald Trump via Truth Social



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125388-1743629845642-c474871a0394e761.jpg?v=1743629853&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: U.S. President Donald Trump via Truth Social



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125381-1743629674285-9b3146f9401db67a.jpg?v=1743629766&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: U.S. President Donald Trump via Truth Social



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125420-1743631430241-GnjytNRWsAE7uF5.jpg?v=1743631805&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: The White House



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/108125421-1743631489523-image_720.png?v=1743631794&amp;vtcrop=y" alt="Chart of reciprocal tariffs. "/></figure>



Chart of reciprocal tariffs.



Courtesy: The White House

108125360-17436290092025-04-02t210742z_1005580332_rc2rpdao7slw_rtrmadp_0_usa-trump-tariffs

See Trump’s list: More than 180 countries and territories facing reciprocal tariffs

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1800" height="1200" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/VFKU2JNBTBIDVNPMOMLDRAUIO4.avif" alt="" class="wp-image-560171"/><figcaption class="wp-element-caption">Pedestrians walk in front of Ghana&#8217;s central bank building in Accra, Ghana, November 16, 2015. REUTERS/Francis Kokoroko/File Photo</figcaption></figure>



ACCRA, April 2 (Reuters)&nbsp;&#8211;&nbsp;Two of the five&nbsp;members of the Ghana&nbsp;central bank&#8217;s&nbsp;Monetary Policy&nbsp;Committee (MPC)&nbsp;voted for its prime interest rate to be kept at 27% during the last meeting, at which the bank hiked the rate by 100 basis points to 28%, minutes showed on Wednesday.



The split decision highlights diverging views within the Bank of Ghana&#8217;s MPC over how aggressively to tackle inflation.



Announcing the surprise rate hike on Friday, governor Johnson Asiama said the tight monetary policy stance was needed to lower inflation.



Ghana&#8217;s annual consumer inflation slowed for a third straight month to 22.4% in March from 23.1% the previous month, the country&#8217;s statistics agency said earlier on Wednesday.



Asiama had previously warned that consumer inflation in the gold, oil and cocoa-producing West African nation remains &#8220;uncomfortably high&#8221; and above the bank&#8217;s target of 8% with a margin of error of 2 percentage points either side.



(Reporting by Christian Akorlie; Writing by Bate Felix; Editing by Chizu Nomiyama)

VFKU2JNBTBIDVNPMOMLDRAUIO4

Ghana central bank’s MPC split over rate decision, minutes show

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-820x547.jpg" alt="" class="wp-image-581989" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/02/TEARGEYJVBNJZJNNXKQV4QH2KQ-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: U.S. President Donald Trump speaks to an audience at the &#8220;American Freedom Tour&#8221; event in Memphis, Tennessee, U.S., June 18, 2022. REUTERS/Karen Pulfer Focht/File Photo</figcaption></figure>



President Donald Trump in recent weeks has changed his tariff policies more often than some of us change our clothes. The velocity of tariff changes has probably provoked a few nervous breakdowns in the accounts department of American companies trading goods with Mexico and Canada. So far, the African continent has been largely unaffected. The question ahead of 2 April, Trump’s “liberation day”, when he unveils his tariff plans, will we still be so relaxed?



We think the continent can, mostly, relax.



<h1 class="wp-block-heading" id="h-what-does-the-trump-administration-want-to-achieve-with-his-trade-war">What does the Trump administration want to achieve with his trade war?</h1>



Many are still unsure what the Trump administration’s goal is with tariffs.



Why does it matter? Because it means analysis of the potential tariffs on 2nd April are over-complicating the issue. There is too much focus on scenarios like “reciprocal tariffs” (the US will match the tariffs others use against the US), or “including VAT tariffs” (because of the potential US stance that value-added tax act as a de facto tariff).



For reasons we outline below – in this piece we consider just three scenarios.



<ol style="list-style-type:upper-alpha" class="wp-block-list">
<li>The US tariffs everybody</li>



<li>The US tariffs everybody who runs a trade surplus with the US, and</li>



<li>The US tariffs everything except commodities that the US imports.</li>
</ol>



One political consultancy last week told us that the US wants to use the threat of tariffs as leverage for others like the EU or India to cut their tariffs. In the end, tariff threats today may lower global tariffs and therefore boost global trade. We think this is the US Treasury secretary’s hope; however, it does not reflect the rhetoric of the President. We believe this outcome is highly optimistic.



Others focus on the US President’s fond reminisces about the 19th century when tariffs were responsible for most US government revenues, and his hope that tariffs will fund tax cuts. This position ignores the fact that US government spending was less than 10% of GDP in the 19th century, while today it is over 30% of GDP. Tariffs cannot possibly replace income taxes, but yes, at the margin it may help the deficit.



Another view is that the current administration genuinely believes it can create a manufacturing renaissance in the US, with American sweatshops of the 19th century rising again and displacing imports from Asia or Africa. We will be a little surprised if Americans want to compete with the $100-$200 monthly wages of Bangladesh. We also note that in President Trump’s first term, foreign direct investment in the US fell, so the policy did not work.



Our reading of the President’s biographies suggests his tariff views might be viewed as deeply personal. President Trump hates weakness and sees deficits as a weakness which might infect the US. As such, the focus is rarely on the service sector, where the US runs a surplus, but only about trade where it runs a deficit. The current policy stance might not recognise that buying cheap t-shirts from abroad allows Americans work in higher value-added jobs at Google and saves them money so they can spend more at home. As imports are a



small share of the US economy, the import bill is not greatly negative. We pencil in the assumption that the US imposes 10% tariffs but recognise this may be just against countries who have a trade surplus with the US.



<h1 class="wp-block-heading" id="h-who-does-the-us-have-a-trade-deficit-with">Who does the US have a trade deficit with?</h1>



If there is one African country that should be more worried than most, it is South Africa. They are not having it easy, given the cabal of South African immigrants whispering into the US President’s ear. It is perhaps bad timing for South Africa to have a $9bn trade surplus with the US. South Africa’s potential exclusion from AGOA and an inclusion of 10% tariffs both seem eminently plausible.



The next three countries in the proverbial firing line are Nigeria, Algeria and Angola.



Two of the Trump administration’s favourite African countries, Egypt and Morocco, run deficits with the US, thus if any countries on the continent are going to escape 2nd April unscathed, it should be these two. Indeed, over half the continent can argue the case that they run deficits with the US. It wouldn’t surprise us if they are untouched.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1134" height="603" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1.png" alt="" class="wp-image-604880" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1.png 1134w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-300x160.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-820x436.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-160x85.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-1-768x408.png 768w" sizes="auto, (max-width: 1134px) 100vw, 1134px" /></figure>



The commodity experts have noticed that the US is running the biggest trade deficits with Africa’s biggest commodity exporters. Over half of South Africa’s exports to the US are precious metals, diamonds, jewelry and platinum. The vast majority of Nigeria, Algeria and Angola’s exports are oil.



Is the US administration so focused on signaling strength as to tariff the commodities that US industry wants, or the US oil industry refines so it can sell back to Africa?



Yes.



The US has already begun an investigation into copper, which might see tariffs enacted on that mineral. This is why copper prices are surging in recent weeks, as stockpiles are built up, just in case. While there was talk of a lower 10% tariff being imposed on Canadian oil vs 25% on Canada’s other exports, in the end this did not happen.



Does it really matter to an oil exporter if the US imposes tariffs? Not much.



Exporters can divert their oil to any other country. The same will be true of most commodities.



<h1 class="wp-block-heading">How important is the US as an export destination for any African country?</h1>



The US does not trade much with Africa. It imported $39bn of goods in 2024, which is roughly what it imports from Mexico or Canada in just over a month. The US imports more in 24 hours from either of them (over $1bn a day), than it imports in a year from about 40 African countries. The biggest exceptions are South Africa and to some extent Nigeria, which account for over half of everything the US imports from the continent.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1121" height="633" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2.png" alt="" class="wp-image-604881" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2.png 1121w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2-820x463.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-2-768x434.png 768w" sizes="auto, (max-width: 1121px) 100vw, 1121px" /></figure>



Fortunately for most African countries, the US is not that important either. For over half the countries in Africa, the US accounts for 2% or less of total exports.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1149" height="589" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3.png" alt="" class="wp-image-604882" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3.png 1149w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3-300x154.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3-820x420.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3-160x82.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-3-768x394.png 768w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /></figure>



Share of exports is however not the right metric. Instead, we need to understand how open an economy is, by examining how high exports are as a proportion of GDP. So, the best metric is to look at “exports to the US” as a share of the exporting country’s GDP.



When we do this, we find it is Lesotho which gets hit hardest. Its exports to the US are equivalent to 10% of its GDP. That’s particularly unfair because Trump doesn’t believe anyone has even heard of <a href="https://x.com/khayadlanga/status/1897215513270608284">Lesotho.</a>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1149" height="559" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4.png" alt="" class="wp-image-604883" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4.png 1149w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-300x146.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-820x399.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-160x78.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-4-768x374.png 768w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /></figure>



How much pain would be imposed by 10% US tariffs. We should assume that US retailers may cut their margins by a 2-3%, and Lesotho exporters may do the same. Together that could halve the impact of the tariffs. We might see some currency weakness against the US dollar – even just 5% would then offset the remaining impact.



We can be more bearish and suggest 10% tariffs cut exports to the US by 5% and being extra bearish, assume that countries cannot re-direct their exports elsewhere. For Lesotho, that would cut GDP by about 0.5%, but it is an extreme and unlikely scenario. For South Africa, that would be an impact worth 0.2% of GDP (5% of the 4% of GDP figure above). For Nigeria, the impact would be half this at 0.1% of GDP. But this is surely an exaggeration, because Nigerian oil can be sold elsewhere.



<h1 class="wp-block-heading">What about indirect effects of Trump’s trade wars?</h1>



Should anyone worry about the Trump administration’s tariffs? Yes. There are 14 countries (excluding a few tiny islands) where exports to the US as a share of GDP are higher than Lesotho. Mexico and Vietnam have 27% of their GDP coming from exports to the US. A worst-case 5% hit to that figure from 10% tariffs would strip 1.35% off economic output.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1150" height="440" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5.png" alt="" class="wp-image-604884" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5.png 1150w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-300x115.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-820x314.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-160x61.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-5-768x294.png 768w" sizes="auto, (max-width: 1150px) 100vw, 1150px" /></figure>



This would be more painful if tariffs are higher than 10%. For the EU and China, we think there will be (tariffs on China have already been hiked to 20% since Trump took office in January). Germany, still one of the world’s top 5 economies could suffer more if the tariffs imposed on the EU are around 25%. If exports drop 10-15%, that might be a 0.4% of GDP hit. We know Germany is planning on a fiscal bazooka to lift its economy and balance the effect of tariffs. GDP growth is likely to accelerate versus the pre-Trump baseline, even if he imposes 25% tariffs; so, Germany may buy more from the rest of the world, including Africa. What about China, where the Trump administration has talked about 50-60% tariffs? Only 2% of China’s GDP comes from exports to the US, so an absolute worst-case scenario would not see more than 0.5% of GDP taken off China’s growth, and China is promising fiscal stimulus too. Any slowdown in China would matter more to Africa. The share of South African exports going to China is double that going to the US. It does not look likely that US tariffs will cause a very high amount of pain to China, or to its trading partners.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1124" height="605" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6.png" alt="" class="wp-image-604885" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6.png 1124w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-300x161.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-820x441.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-160x86.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-6-768x413.png 768w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Nonetheless, some small indirect impact on Africa is likely to come from Trump’s tariffs. Global trade is likely to be hit, cutting demand for energy, and pushing oil prices down. Even here, we should be cautious. Global trade may just be re-directed as happened in 2018 when China stopped buying soyabeans from the US and bought them from Brazil instead regardless of the longer shipping route. Consequently, US soyabean exports took Brazil’s previous export markets, again probably adding to shipping and fuel costs.



The key point is that the US is not the only economy in town. Yes, it is responsible for half the world’s current account deficit, so it matters, but it doesn’t matter too much to Africa.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1110" height="436" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7.png" alt="" class="wp-image-604886" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7.png 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-300x118.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-820x322.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-160x63.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/04/Image-7-768x302.png 768w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /></figure>



<h1 class="wp-block-heading">What about inflation and US interest rates?</h1>



Should Africa worry because tariffs are inflationary and they might prompt the Fed to raise interest rates, or cut interest rates less than expected?



The last thing we want to see on the continent is more countries running onto the default rocks. From Mozambique to Senegal, we can see that is still a risk. The Fed kind of answered this question last week. They see tariffs as transitory (yes, we have heard that before), because while there will be a one-off adjustment in prices, there should not be a price-wage spiral as we saw after COVID.



That might underestimate where the Trump administration goes with tariffs. Their last trade war did not achieve preset objectives. The deficit with China remained massive. Perhaps this time the target is to succeed via a continuous ramping up of tariffs. We cannot know this, but at least today, we can be comforted by the Fed’s view that tariffs are a negative for GDP growth, and more important than the inflation impact. As such, the FED assumes two fund rate cuts in this year and another two next year.



<h1 class="wp-block-heading">Conclusion</h1>



We cannot be sure if the Trump administration will impose tariffs on any African countries at all, and if he does, he might go after only the minority of countries. We do not believe AGOA will offer any more protection than NAFTA did in 2016, or its successor USMCA has done in 2025. We do think South Africa is likely to face tariffs, and that it will be Lesotho which gets hit hardest if Trump imposes universal tariffs.



Our most important conclusion is that Trump’s tariffs won’t matter too much, assuming they’re just 10% on Africa.



Enjoy April and be thankful you did not emigrate (japa) to tariff-hit Canada.

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