Time for Europe and Africa to move beyond colonial-era trade – African Business

An Analysis of AU-EU Trade and Aid Dynamics in the Context of the Sustainable Development Goals

Introduction: Persistent Imbalances and the SDG Framework

In anticipation of the 7th African Union–European Union Summit, this report assesses the structural imbalances in the continents’ trade and aid relationship through the lens of the Sustainable Development Goals (SDGs). More than six decades post-colonialism, the economic partnership remains characterized by an extractive trade model that hinders Africa’s progress towards key development objectives, particularly SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 10 (Reduced Inequalities). The current framework fails to fully align with the principles of SDG 17 (Partnerships for the Goals), which calls for equitable and mutually beneficial cooperation.

Current Trade Profile: A Barrier to SDG 8 and SDG 9

The existing trade patterns between Africa and the European Union are misaligned with the goals of sustainable industrialization and economic diversification. Analysis of Eurostat data from 2022-2024 reveals a dependency on raw materials, which directly conflicts with the ambitions of AU Agenda 2063 and undermines the achievement of SDG 9.

• Dominance of Raw Materials: Minerals and fuels constituted 53% of Africa’s exports to the EU, totaling €194 billion. This reliance on primary commodities limits opportunities for creating higher-value jobs as envisioned in SDG 8.
• Minimal Value-Added Exports: Higher-value goods represented a marginal share of exports. Key categories included:
  1. Vehicles and parts (6%)
  2. Electrical machinery (5%)
  3. Cocoa products (3%)
  4. Apparel (3%)
• Contradiction with Development Goals: This trade structure perpetuates a colonial-era economic model, preventing the development of robust industrial capacities and diversified economies essential for sustainable growth under SDG 9.

The Role of Economic Partnership Agreements (EPAs) in Perpetuating Inequality (SDG 10)

The transition from non-reciprocal trade preferences under the Lomé and Cotonou Agreements to reciprocal Economic Partnership Agreements (EPAs) has raised significant concerns regarding fairness and its impact on African industrial development. The implementation of EPAs has, in several cases, exacerbated economic vulnerabilities, challenging the spirit of SDG 10 (Reduced Inequalities) and SDG 17 (Partnerships for the Goals).

• Demanding Liberalisation Schedules: Nations including Ghana, Côte d’Ivoire, and Kenya have ratified EPAs with stringent tariff-liberalisation schedules on EU imports, potentially undermining nascent local industries and hindering progress on SDG 9.
• Undermining Regional Integration: Kenya’s bilateral EPA includes tariff rates on certain EU goods that are below the East African Community’s Common External Tariff, weakening regional efforts to protect local producers.
• Resistance to Unfavourable Terms: Nigeria resisted an EPA due to EU demands for extensive tariff liberalisation, which conflicted with Nigeria’s national strategy to foster domestic production through investor incentives. The EU’s inflexibility risked reinforcing a cycle where Nigeria exports raw materials and imports finished goods, a direct impediment to achieving SDG 8 and SDG 9.

Evaluating “Aid for Trade” and the Global Gateway Initiative against SDG 9

While the EU is a leading provider of “Aid for Trade,” the strategic focus of these funds and the Global Gateway initiative requires scrutiny. The current emphasis on large-scale infrastructure, without parallel investment in productive capacity, may not be sufficient to achieve the transformative goals of sustainable industrialization as outlined in SDG 9.

• Infrastructure Focus: A majority of aid is directed towards trade-related infrastructure such as ports, customs reform, and transport corridors.
• Insufficient Support for Value Chains: There is a notable lack of targeted funding for developing specific agricultural, manufacturing, and service value chains within Africa.
• Geostrategic Interests: Critics argue that initiatives like the Global Gateway are primarily aimed at securing EU access to African raw materials to reduce dependency on other global powers, rather than systematically building African industrial capacity in line with SDG 9.
• Risk of Reinforcing Old Models: Investing in infrastructure designed to facilitate the export of unprocessed resources, without complementary support for local processing and manufacturing, risks modernizing and entrenching the colonial-era extractive economic model.

Recommendations for a Partnership Aligned with the SDGs

To forge a genuine partnership for sustainable development as envisioned in SDG 17, both the AU and EU must recalibrate their approach. The upcoming summit provides a critical opportunity to align trade and aid policies with the shared objectives of the SDGs and Agenda 2063.

1. Reform EPAs for Industrialisation: The EU should revise EPA terms to provide African nations with the policy space and flexibility needed to use tariff structures strategically to promote local production and economic diversification, directly supporting SDG 9.
2. Align Aid with Value-Chain Development: EU “Aid for Trade” and Global Gateway investments must move beyond a generic focus on infrastructure and align with Africa’s sector-specific strategies for building value-added industries, contributing to SDG 8 and SDG 9.
3. Embrace Co-Architecture in Policy Design: Aid frameworks must be co-designed with African partners to ensure they reflect continental priorities and foster genuine ownership, embodying the collaborative spirit of SDG 17.
4. Leverage Africa’s Geopolitical Position: African leaders should use their collective leverage to insist that all trade and aid agreements are structured to support higher value-added exports and sustainable industrial development.
5. Redefine Success Metrics: Progress should be measured not by the volume of raw material exports but by the degree of value addition, job creation, and economic complexity generated within African economies, providing tangible indicators for SDG 8.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth: The article’s central theme is the need for Africa to transform its economy from one based on raw material exports to one focused on diversified, higher value-added goods. This directly relates to promoting sustained, inclusive, and sustainable economic growth.
• SDG 9: Industry, Innovation, and Infrastructure: The text extensively discusses industrialisation, value addition, and infrastructure. It critiques the current focus of EU aid on infrastructure for resource extraction and calls for investment in building African industrial capacities and processing facilities.
• SDG 10: Reduced Inequalities: The article highlights the “persistent structural imbalances” in the trade relationship between the EU and Africa, which mirror colonial-era patterns. It discusses how Economic Partnership Agreements (EPAs) can be unfavorable for African nations, thus perpetuating economic inequality between regions.
• SDG 17: Partnerships for the Goals: The entire article is a critique and reassessment of the AU-EU partnership. It calls for a more equitable partnership where trade agreements and aid policies are co-designed and genuinely support Africa’s development agenda (Agenda 2063), reflecting the core principles of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8: Decent Work and Economic Growth

  • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article’s main argument is that Africa’s trade profile must shift from raw material exports to “diversified, higher value-added goods,” which is the essence of this target.
  • Target 8.a: Increase Aid for Trade support for developing countries. The article explicitly mentions the EU’s “Aid for Trade” program and critiques its implementation, arguing that funds are misaligned with Africa’s need for “targeted value-chain development.”

• SDG 9: Industry, Innovation, and Infrastructure

  • Target 9.2: Promote inclusive and sustainable industrialization. The article directly references the AU’s Agenda 2063, which “prioritises industrialisation, value addition and economic diversification,” and criticizes EU policies for not systematically “building African industrial capacities.”
  • Target 9.b: Support domestic technology development, research and innovation in developing countries… to ensure a conducive policy environment for, inter alia, industrial diversification and value addition to commodities. The article supports Nigeria’s stance of resisting extensive tariff liberalisation to “encourage domestic production” and have EU firms “invest in local manufacturing.”

• SDG 10: Reduced Inequalities

  • Target 10.a: Implement the principle of special and differential treatment for developing countries… in accordance with World Trade Organization agreements. The article discusses how the EU has used flexibility in WTO-consistent EPAs in ways “that are unfavorable for Africa’s non-LDCs,” citing Ghana’s capitulation to “far-reaching EU demands” and Kenya’s undermining of the EAC’s Common External Tariff.

• SDG 17: Partnerships for the Goals

  • Target 17.11: Significantly increase the exports of developing countries. The article analyzes Africa’s export profile to the EU, but more importantly, it argues for increasing the *value* of these exports, not just the volume, by moving up the value chain.
  • Target 17.15: Respect each country’s policy space and leadership to establish and implement policies for poverty eradication and sustainable development. The article criticizes how “EU aid frameworks are drafted in Brussels,” with African governments treated as “implementers rather than co-architects,” and calls for the EU to align its aid with “Africa’s own priorities.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Share of value-added goods in total exports: The article provides specific data that serves as a baseline indicator. It states that between 2022 and 2024, “minerals and fuels made up 53% of Africa’s exports to the EU,” while manufactured goods like “Vehicles and parts (6%)” and “electrical machinery (5%)” had very low shares. Progress would be measured by an increase in the percentage of these higher-value goods.
• Degree of value addition generated within African economies: The article explicitly proposes this as a key metric, stating, “Progress should be measured less by export volumes and more by the degree of value addition generated within African economies.” This implies tracking the growth of processing and manufacturing sectors relative to the extractive sector.
• Allocation of “Aid for Trade” funds: An indicator is implied by the critique that most EU aid funds “go to trade-related infrastructure… rather than targeted value-chain development.” Progress could be measured by tracking the percentage of aid dedicated specifically to building industrial capacity, processing facilities, and sector-specific value chains versus general infrastructure like ports and corridors.
• Terms of tariff-liberalisation in trade agreements: The article points to the “demanding tariff-liberalisation schedules” in EPAs as a negative indicator. It gives the example of Kenya agreeing to a “25% tariff on EU wines and spirits, below the EAC CET rate of 35% intended to protect local producers.” The terms of these agreements, specifically the level and phase-in period of tariff reductions on sensitive local industries, can be used as an indicator of the partnership’s equity.

SDGs, Targets, and Indicators Summary

Source: african.business