Exploring the economic realities of Canada-Africa trade
- Oluwatobi Ogundele
- Mar 3
- 4 min read
Updated: Mar 7
‘Trade has been facing challenging times with increasing protectionism and protectionist measures.’ This statement made in January 2025 by the World Trade Organization’s (WTO) Director General, Ngozi Okonjo-Iweala in an interview with CNN’s Fareed Zakaria, captures the current tone of global trade. She adds ‘…there is cause to worry as we are seeing increasing fragmentation and protectionism’. As trade wars brew between western allies, Africa is getting some airtime in international trade discourse.
The protectionist tête-à-tête fueled by President Trump’s tariffs is making things difficult for countries like Canada who are reliant on trade with the US. In 2023, for example, Canadian exports to the US was 78% of total Canadian exports. [1] Thus, one can imagine the gravity of a 25% import tariff levied on Canadian exports to the US. [2] [3]
While the trade dance is ongoing, some interest in why Canada should look beyond the unpredictable US to African countries has arisen. Articles on Why Canada must look beyond the U.S. to Africa’s economic boom, The Future of Canada's Trade Strategy: Diversifying Towards Africa | LinkedIn, Why Canada Must Launch Its Long-Awaited Africa Strategy and Why Canada must seize the moment and launch its long-awaited Africa strategy expound on this. The missing piece seems to be that currently, Africa cannot, at this time or within the next decade rise to the occasion of picking up the US’s trade slack because what Canada needs is not what Africa is currently positioned to provide. This is in terms of trade infrastructure, technology and products, except business as usual becomes business unusual. Mechanisms that are significant for trade facilitation are still lacking in African countries. This consideration should form the basis of a Canada-Africa trade strategy.
How much trade does Canada have with African countries?
Global Affairs Canada’s Office of the Economist reports that in 2023, exports to Africa & the Middle East accounted for 1.6% of Canada’s merchandise exports, imports accounted for 2.1%. Compared to exports to the US of almost 80% and imports from the US to Canada of 50%. In fact, exports from Canada to Africa witnessed negative growth in 2022 and to some extent in 2023. While there appeared to be growth in imports to Canada from Sub-Saharan Africa in 2023, this grow was negated by the decline in North African imports to Canada from - Egypt (-35.9%) and Algeria (-20.8%). It is not mere coincidence that Canadian imports from Sub-Saharan Africa fared better in the same year that imports from North Africa declined if one understands what Canada imports from African countries – inputs from resource-based sectors [4].
Crude oil-rich Nigeria is having a trade moment with Canada. Canadian imports from Nigeria increased from $ 1.7 billion to $ 3 billion between 2022 and 2023, of this, $ 2.17 billion were crude oil imports, others were (fuel) oils and cocoa. [5]. Canada does trade with Africa but, this has been very limited and in resource-based sectors that Africa should be leveling up from. These primary products in resource-based sectors do not challenge the ingenuity of or functionality of African manufacturing and processing sectors, neither are they sectors that Canada imports, on a large scale, from the US and Europe. [5] [6] The point is that Canada-Africa trade is in Canada’s comfort zone, it does help Canada, but Africa remains at a loss. Trade 101 suggests that a heavy dependence on primary commodity exports has been Africa’s trade waterloo leaving the development of internal manufacturing capacity of less priority. This challenge of not diversifying exports has historically hampered African economies’ competitiveness in global trade and stands to prevent an enhanced Canada – Africa trade relationship. [7]
What should a forward looking Canada-Africa trade strategy cover?
On the imports side, judging by the type and volume of products imported by Canada from the US and Europe, Canada needs sources for aircraft and transport equipment and parts, motor vehicles and parts etc. [6] Approximately 34% of Canadian intermediate goods of this caliber come from the US and 42% from Europe. [8] The central question is whether African countries can supply these to Canada as Canada seeks to call the US’s bluff. The answer is a resounding no, Africa is currently unable to provide these products in the quantity in demand by Canada.
There is yet hope. The Government of Canada is really committed to engaging in more trade with African countries as part of Canada’s overall export diversification strategy. [9] The Canada-Africa strategy is still in the pipeline, with a consultation process that began in May 2023 and the hope is that the strategy signals some level of support for research, trade infrastructure development, collaborative learning opportunities and commitment on advanced manufacturing and processing activities, education and upskilling, enhanced public agencies and trade offices, brain gain opportunities from the African diaspora, as African countries continue to suffer an acute glut of their population.
Conclusively, Canada must do grunt work for deep trade collaboration with African countries – A trade relationship with a development focus. Development, unfortunately, does not happen quickly. While Canada scours the earth for new trade partners other than Trump-led US, African countries can do two things to contribute to a Canada-Africa strategy: i) ensure that public sector and private sector representatives are present in trade dialogues with Canada, so that trade strategies are solution-oriented and accurately underscore the challenges faced in facilitating advanced and technologically driven trade, and ii) be willing to adopt and implement existing frameworks that have proven to be effective in delivering trade initiatives globally such as the Articles in the WTO’s Trade Facilitation Agreement.
References
Author's bio
Oluwatobi Ogundele's economics experience and interests have been in the areas of competition law and policy, trade, health and migration. She has masters degrees in Economics and in International Public Policy with specialization in International Economic Relations and Global Governance.
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