With global trade facing rising tariffs, geopolitical tensions, and supply chain instability, North African nations are being called to pivot southward.
As the World Trade Organisation forecasts a 0.2% contraction in global goods trade for 2025—potentially worsening to 1.5%—experts say stronger regional integration with Sub-Saharan Africa could offer a vital buffer and new growth opportunities.
According to monitor.co.ug, United Nations Trade and Development warns that policy uncertainty is eroding business confidence and will slow global growth to 2.3 percent in 2025.
Against this backdrop, developing economies are under mounting pressure to diversify partnerships and reduce external dependencies. The pressure is particularly acute for North Africa. The region – comprising Algeria, Egypt, Libya, Morocco, Mauritania, and Tunisia – has long been tethered to European economic cycles.
READ: Africa: Tanzania, Somalia Restore Direct Flights to Boost Trade and Diplomatic Ties
n 2023, the European Union accounted for 45.2 percent of North Africa’s trade, making the region vulnerable to any slowdown in European demand.
At the same time, North Africa has played a marginal role in international commerce, accounting for only 3.7 percent of global trade in 2023. But this moment of uncertainty also represents a strategic opportunity for North Africa to look southward, toward the fast-growing markets of Sub-Saharan Africa (SSA), which currently account for just 2.4 percent of North Africa’s total trade.
As I and others argued nearly a decade ago, stronger economic ties within the continent could reshape regional growth trajectories. That continues to be true today. With SSA’s economic growth estimated at 3.7 percent in 2024 and projected to rise to 4 percent in 2025, the rest of the continent offers many opportunities for North African businesses as an emerging market for manufactured exports and as a region to expand value chains.
North African products – particularly from its automotive, fisheries, food processing, pharmaceuticals, and textiles sectors – would likely be well received in SSA, owing to their good quality and competitive prices. Some progress has been made toward increasing intra-African trade and North Africa’s role in it. Morocco recently became the continent’s leading automobile exporter, with sales of $6.4b in 2023. Many of these cars went to West Africa,.
Some North African countries belong to other regional economic communities, such as the Common Market for Eastern and Southern Africa (COMESA) and the Community of Sahel-Saharan States (CEN-SAD). But the ambitious African Continental Free Trade Area (AfCFTA) offers the best chance of deepening continental integration.
In effect since 2021, the AfCFTA has been signed by 54 countries, making it the world’s largest free-trade area by membership. North Africa could play an important role in driving growth and enhancing trade within this area.
The region has around 200 million consumers and occupies a strategic geographical position between Europe, the Middle East, and SSA.
It also possesses significant natural resources, a diversified industrial base, and relatively well-developed human capital and economic infrastructure. The AfCFTA is widely expected to boost economic growth, private-sector development, investment, and capital flows across the continent.
A forthcoming study by the African Development Bank (AfDB) assessing the AfCFTA’s impact on regional economies using the Global Trade Analysis Project model suggests that this is especially true for North Africa. Under every scenario, North Africa’s GDP and its components are projected to increase by 2031.
The region’s full integration with SSA would bring the largest gains in trade (+5.5 percent) and GDP (+0.77 percent). The AfCFTA’s main downside is in the fiscal domain.
The AfDB study anticipates a reduction in North African countries’ customs revenues; the least affected will be those that have already entered into bilateral free-trade agreements, or that have relatively high levels of economic diversification and strong productive capacities.
But, given the overall benefits, North African economies should make implementation of the AfCFTA a high priority. Enhanced intra-African trade flows would promote further economic diversification, job creation, investment, and GDP growth, generating long-term prosperity and private-sector development in North Africa.
BY A. Verdier-Chouchane
