Category: Business Daily

The Central Bank of Kenya reduced its benchmark interest rate to 9.5 percent for the seventh time in a row during August 2025. The cut forced banking institutions and regular consumers to modify their financial management strategies because of reduced borrowing costs.

The seventh interest rate decrease since 2023 has generated multiple questions about credit market conditions, price stability, and currency exchange rates. Local investors start searching for dependable currency management tools through the best forex brokers in Kenya because market participants focus on currency trading.

The Nairobi business sector demonstrated both optimistic and guarded responses to the interest rate decrease. The decrease in borrowing costs brought comfort to producers, farmers, and regular consumers. Fast-paced interest rate decreases during previous periods have proven to create future inflationary problems. The majority of corporate leaders maintained a positive outlook regarding the current market situation.

A banker from the early 2010s period stated that previous interest rate reductions created a growth surge for businesses of medium size. The banker explained at a city restaurant that businesses tend to grow rapidly when credit becomes available at slightly lower rates. The statement he made supported a widespread market perception in Kenya that lower interest rates enable businesses to access dormant resources.

Interest rate adjustments produce effects which reach past the reduction of bank loan interest rates. The entire financial system experiences direct impacts from these changes. The instant changes in government bond yields create quick reactions in stock market values and currency exchange patterns.

The Eldoret resident who invested in agricultural stocks experienced reduced interest payments from his savings account yet his stock portfolio grew in value. The appreciation of his stock portfolio offset the decreased interest payments from his savings account according to his humorous assessment. The way interest rates influence investors throughout the nation becomes evident through this example of financial equilibrium.

Kenya has experienced numerous economic cycles throughout its history. The central bank lowers interest rates during economic downturns and debt crises to boost lending activity. The central bank implements tightening measures when inflation begins to rise.

The different stages of the economic cycle produce distinct outcomes for market participants. The value of the shilling tends to increase when interest rate reductions draw more foreign capital into the country. The value increase of the currency creates difficulties for exporters but they obtain more affordable financing options.

The story remains fresh because the cycle maintains its continuous nature. Investors who adapt their strategies to market movements perform better during these cycles than investors who maintain fixed approaches.

A textile business operating in Thika demonstrated how interest rate changes affect business operations. The owners postponed equipment upgrades because bank financing costs remained unaffordable for several years.

The lender contacted the company right away after the August interest rate decrease to present new financing alternatives. The company bought new Indian-made looms after just several weeks of operation. The owner expressed his concern about taking on debt but acknowledged the reduced interest rates made investment more feasible.

The economy experiences tangible effects from lower loan rates because businesses across manufacturing and agriculture and property development sectors make important decisions based on these conditions.

The way investors think about their investments strongly affects their decisions. Market trends depend on both numerical data and the positive outlook that emerges from official policy announcements. The seven consecutive rate cuts from the central bank demonstrated to the market that officials would prevent credit restrictions from harming business operations. The announcement itself created increased willingness to take risks.

The Nairobi-based asset manager explained the situation through basic terms. The central bank’s repeated rate cuts create an environment where businesses feel more comfortable to launch their operations. The sentiment remains difficult to quantify but it influences investment choices at the same level as statistical information.

Housing loans also tell part of this story. Mortgage products in Kenya have often been too costly for many middle-class families. The persistent rate reductions allowed banks to restructure some of their housing products.

A young couple in Mombasa mentioned that they had postponed home ownership for years, but the new lower monthly repayment rates gave them confidence to finally sign a contract. Their experience showed how interest rate policy touches not only traders and companies, but also ordinary households making life decisions.

Real estate developers in Nairobi and Kisumu echoed similar sentiments, saying that the cheaper credit environment could help unlock demand in a sector that had slowed down sharply during the previous high-interest years.

Another dimension is the role of diaspora remittances. Kenya receives billions of dollars each year from citizens abroad. When interest rates fall, part of this money often moves into property purchases or small-scale investments rather than sitting in fixed deposits.

Banks report that remittance inflows have remained stable but their allocation changes depending on the credit environment. A financial consultant in Westlands observed that ‘families are more likely to channel diaspora money into construction or agribusiness ventures when credit costs less locally.’ This connection demonstrates how monetary policy indirectly influences remittance-driven investments that play a critical role in Kenya’s economy.

Regional comparisons also shed light on the significance of Kenya’s monetary stance. Neighboring countries like Uganda and Tanzania have maintained higher benchmark rates during the same period. The divergence creates cross-border capital flows as investors look for relative advantages. Some traders even speculate on regional currencies in response to these differences.

This is another point where discussions about forex brokers in Kenya resurface, because investors need reliable platforms to navigate both domestic shilling moves and cross-border dynamics. The search for such brokers becomes not just a retail curiosity but a practical requirement for those actively trading in East Africa’s interconnected markets.

One cannot ignore the agricultural sector in this conversation. Kenya’s farming industry relies heavily on seasonal loans for inputs, machinery, and logistics. Lower interest rates ease the burden on farmers who operate on thin margins.

A maize farmer in Kitale explained how the latest cuts made it possible to finance fertilizer purchases at more manageable rates. His case reflects thousands of similar stories across rural counties where small adjustments in lending rates translate into real differences in productivity. These changes underline the central bank’s influence not only on financial markets but on food security and rural livelihoods as well.

The tourism industry has also felt the change. Hotel operators and tour companies often require financing to upgrade facilities or expand marketing ahead of high season. Lower borrowing costs have provided a chance for some to refresh their properties after years of financial strain.

Industry observers suggest that interest rate policy, while often seen as technical, has ripple effects that extend even into service industries dependent on both local and international demand.

All these examples point to one conclusion; Kenya’s shifting interest rates are not abstract numbers. They influence business expansion plans, family housing choices, agricultural output, and even regional investment flows.

The central bank’s persistence with seven consecutive cuts has produced visible changes in confidence and activity. While risks of inflation and currency volatility remain, the positive impact is already embedded in the decisions of households, companies, and investors across the nation.

Coffee has overtaken key cotton clothes like men’s suits and shorts to become the country’s leading export to the United States, even as the textile sector reels from the expiry of the African Growth and Opportunity Act (Agoa).

Coffee exports to the world’s largest economy surged by 83.50 percent in the first half of 2025 to Sh5.71 billion, latest data from the Kenya National Bureau of Statistics (KNBS) shows, up from Sh3.1 billion in the same period last year.

If you have enough cash, is it actually cheaper to buy and run new cars and replace them before they need major repairs and parts and still have a strong resale value, instead of buying used cars that run less efficiently, need more attention, give more trouble, and depreciate in value? MSD

In a word? No. Across the full range of all motoring costs from purchase to resale, new cars are (almost always) more expensive. Often much more – not just by a percentage, but by a multiple!

Yet nothing is ever that simple in motoring, because it has such a huge range of makes, models, drivers, uses, road conditions, mileages, time spans, owner resources.and other variables. If you want a brand-new car and can well afford it, then go ahead. Enjoy.

No one buys a new car to save money. People do so because they want to and they can – for pleasure and/or prestige, socially or professionally, and in expectation of greater reliability and the most advanced technology. That’s a fair expectation, but it is not a guarantee.

Yes, a new car will have a potentially longer lifespan, but for how much of that will the new car buyer remain the owner? It would take decades to gain any overall economic advantage. And for most of that time, you would not be driving a ‘new’ car. It ceases to be ‘brand new’ as soon as it drives out of the showroom!

But if covering the initial price is difficult or the overall economy is crucial, a used car could save you a lot.without any major heartache, headache, or loss of utility or reliability. Choice is a balance between essentials and indulgences.

The economic advantage of buying used cars is especially true in Kenya, where new car prices are among the highest in the world (because our volumes are low in business-margin scales and our taxes are high) and we have access to one of the biggest and best used car lots in the world (Japan), where their national economic policies make used vehicles roadworthy and especially cheap: their 80 million vehicles are almost all made in Japan and pay no import duty when new, they are expected to be maintained in nigh perfect condition, and when they reach eight years old they face such stringent and expensive licensing conditions that local resale values plunge and it is indeed cheaper to buy new.

The result is very, very good for their domestic car manufacturing industry (a pillar of their economy), is good for their motoring reliability, safety, and emissions standards, and generates a large number of eight-year-olds in excellent condition.for export (!) at unbeatably competitive prices.

We buy them. That’s where nearly 90 percent of our imports come from.

What this does for our national economy is open to debate. What it does for the individual motorist is clear. Used cars are effective and widely affordable. New ones are – in practical terms – an expensive indulgence.

To simplify the calculation, set aside the motoring costs that are relatively similar, irrespective of age. Things like fuel consumption, oil changes, tyre wear, brake wear, general routine service, and short-life parts like filters.

These can vary a lot from car to car and driver to driver usage but remain similar (per kilometre of use) between cars that are nearly new and those of a similar class that are quite old.

Excluding those items, the really big cost differences are in purchase price, insurance premium, and rate/scale of depreciation.

Even in the ‘middle range’ of a good quality family car, the new option will cost about three times the price and therefore lose resale value at more than twice the sum of a used import, and cost two or three times as much to insure.

That alone is a difference of millions over an ownership period of several years – far, far more than the older car is likely to cost to restore and or maintain over the same period.

Worldwide, the difference is even more extreme at the large/prestige/luxury end of the market.

As a widespread rule, new cars – from the moment they leave the showroom – depreciate by about 20 percent of their much higher price in the first year and 10 percent per year thereafter until their resale value is about 80 percent less than the new price, at which point they become ‘runners’ and their market value depends primarily on condition, not age.

A used car continues to depreciate at the same percentage (of a far lower figure) until the ‘runner’ stage, but if it starts its extended life in good condition, is well maintained and sympathetically used, it makes no significant difference to any of its ‘values’ (price or utility) whether it goes on for another 10, 20 or 30 years.

I bought a 20-year-old Prado about a decade ago. It has done well over 300,000 kms (including extensive use in expeditionary conditions, and it is not parked on a silk cushion), and is still worth about the same as I paid for it. Depreciation zero. If I bought a car of the same class today, it would cost more than ten times what I paid for mine, and it would cost ten times as much to insure. The money I am not spending on a new one is earning interest in a bank. In terms of utility, my old car will do exactly the same things as a new one. Other than routine service items (which are the same as for a new car), in ten years and 150,000 kms, I have spent less than shs 20k on replacement parts. There are some blips in the dashboard electrics, but no indications of any incipient failure of the engine, gearbox, drive train, steering, suspension, or bodywork. Its oil and water etc, never need topping up between services. I do exactly what I would do in a new one with less anxiety and at incomparably lower cost.

I more recently added a 30-year-old Land-Cruiser safari wagon, for 10 percent of the price of a new one. So far, its story is much the same at +300,000 kms.

As these testimonies add up to a sort of ‘recommendation’ of old cars, I would emphasise that both these vehicles had good provenance and were absolutely sound when I got them; they are well serviced with strict regularity, any minor defect is attended to before it becomes more serious, and the vehicles are used fully (often robustly) but sympathetically. All parts, service, or replacement are OE, not bandit junk.

In sum, a new car is probably more tolerant of neglect and abuse…for a while. The moral for getting optimum cost-saving value from an old one is to research previous ownership and use, fully fix it before you start, and maintain it diligently and thoroughly as the miles and years go on.and on.

As I write this, I wonder whether there might be a ‘sweet spot’ in the evolution of car design – between the simple but crude distant past, and the highly sophisticated but technically complex present.

We’ll see where the global battle for production volumes and margins takes us next. After all, the ultimate ‘driving’ force of design, manufacture, and marketing is profit, not perfection.

A consortium led by China Road and Bridge Corporation (CRBC) has won a Sh170 billion deal to build the Nairobi-Nakuru-Mau Summit highway after quoting a lower base toll rate than the French contractors initially awarded the contract.

The Kenya National Highways Authority (KeNHA) announced on Thursday that China Road and Bridge Corporation (CRBC, in partnership with the National Social Security Fund (NSSF), has been selected to undertake the construction of the highway.

What does it take to trade effectively? Many would point to experience, knowledge, or intuition. But even the most skilled market participants cannot perform without the right conditions. Execution quality, transparency, and stability may not be as visible as a chart or an indicator, yet they allow traders to approach the markets with clarity, consistency, and control.

When execution falters, even the best strategies can unravel. Trades may open or close at prices far from expectations, stop losses may slip beyond their limits, and spreads may widen just as volatility peaks.

This is why traders place so much weight on the reliability of their broker and they turn to Exness, a broker known for providing the kind of reliable and frictionless trading experience that supports traders when it matters most.

What do traders need?

In calm markets or during volatility, traders depend on five key ingredients:

Fast execution: Orders must be placed instantly, especially when prices move in milliseconds.

Precision: Trades should be executed as close as possible to the intended price, so that tools like stop losses work as planned.

Reliability: Platforms must perform under pressure. Downtime or delays can mean missed opportunities or unnecessary risk.

Transparency: Spreads and fees should be clear and consistent, not hidden in fine print or subject to sudden changes.

Control: Traders need the ability to manage exposure, keeping their positions and funds under their control.

Let’s examine how these ingredients work in practice and why they matter most during periods of volatility.

Gaps become clear only when platforms fail

The unfortunate reality is that some of these conditions are only ‘visible’ when you start experiencing them, and painfully obvious only when they fail.

Slow execution becomes obvious only when it results in slippage and missed opportunities. Negative Balance Protection becomes relevant when extreme volatility pushes an account into negative territory.

Platform reliability may go unnoticed for months until downtime interrupts a crucial trade. This is why choosing a broker with proven consistency matters. Exness has built its reputation by making these elements visible upfront-communicating conditions clearly and proving them at scale through data and research.

Technology that makes a difference

A trader might find it challenging to find the right ‘recipe’ of conditions to ensure they have the best possible advantage on the market.

Some brokers may offer one or two of the five ingredients, but very few deliver all of them in unison. And since these features are interconnected, missing one can undermine the rest. Precision, for example, is almost impossible without fast execution.

Exness backs up its conditions with real-world performance data. Thanks to its proprietary liquidity engine, clients experience three times less slippage than the industry standard.1 This feature ensures that execution remains precise and conditions remain stable, even under volatility.

Spread stability and lower costs

Spreads are another area where conditions can make or break a strategy. During high-impact news, many brokers widen spreads dramatically, raising costs at the worst possible time. Exness, by contrast, offers some of the market’s lowest and most stable spreads.

Spreads on gold (XAUUSD) have been reduced by 20 percent, helping traders manage one of the most in-demand safe-haven assets.

Spreads on USOIL have been reduced by 69.4 percent, a major advantage given oil’s sensitivity to OPEC+ decisions and supply disruptions.

Spreads on US indices are down by as much as 82 percent, cutting costs in one of the most widely traded markets.

These reductions aren’t just numbers-they give traders confidence that conditions will hold even when volatility spikes.

What if you don’t have the five advantages?

The consequences of missing any of these conditions are clear in real-world scenarios.

Traders facing slow execution saw slippage magnify losses or diminish returns. Those trading with brokers that widened spreads significantly may have managed to profit, but much of it would have been consumed by higher costs.

Without these five key ingredients-fast execution, precision, reliability, transparency, and control-strategies are left exposed.

With them, traders gain the consistency needed to withstand volatility and continue trading on their terms.

So, choose your broker wisely and ensure that the conditions you need to succeed are the conditions they are committed to offering.

3x less slippage claims refer to average slippage rates on pending orders based on data collected between September 2024 and July 2025 for XAUUSD, USOIL, and BTC CFDs on the Exness Standard account vs similar accounts offered by four other brokers. Delays and slippage may occur. No guarantee of execution speed or precision is provided.

Stable spread claims refer to maximum spreads on XAUUSD, USDJPY, EURUSD, and GBPUSD for the first two seconds following high-impact news. This comparison is made between the Exness Pro account and commission-free accounts of several other brokers, all excluding agent commission, from 1 January to 23 August 2024.

Spread reduction refers to spreads on Pro accounts, sampled over the first full trading week of July 2024 compared to the last full trading week of August 2025.

PZ Cussons East Africa is investing Sh150 million to introduce products targeting the younger generation, even as it allays fears of exiting the Kenyan market.

The firm, which produces brands such as Imperial Leather and Carex, said it was working on introducing new fragrances, distribution channels and package sizes in a bid to grow its sales among those aged below 35 years.

The company, which enjoys a 25 percent share in Kenya’s beauty and personal care market, had triggered concerns of exiting the market after its divestiture in Nigeria’s PZ Wilmar edible oils and remarks by its top management that it was reviewing its African operations. ‘Our research shows that consumers in this region under 35 years are adventurous with fragrance and personal care, consistently stretching their imagination and experimentation with new formats, favouring bold, differentiated scents and buying across online and modern retail channels,’ said PZ Cussons EA Managing Director Sekar Ramamoorthy.

‘PZ Cussons intends to grow here and has no plans to divest from the local market,’ he added.

Mr Rammoorthy said those below 35 years constitute between 35-45 percent of what is spent on personal care.

‘The category we play in is increasingly becoming more nuanced, with differentiation leaning towards niche markets. We are opting to go for broader sections of the population, having recognised that they have more in common,’ said Mr Ramamoorthy.

Cussons has been operating in Kenya for over 60 years and has a production unit at Baba Dogo. Kenya, the United States and Ghana contribute 15 percent of the company’s global revenues.

‘Kenya delivered good, volume-led growth driven by strong Modern Trade performance,’ PZ Cussons said in its annual report.

Kenya’s beauty and personal-care market is estimated at Sh20 billion and shows a steady high-single-digit growth rate.

Margins made by local soap manufacturers have taken a hit from heightened competition from imports from Egypt and reduced buying power due to inflation.

The Kenyan beauty market has also been cited for being flooded with counterfeit and sub-standard products, which hurts producers of quality goods.

Kigen manages a payments team in Westlands, Nairobi and treats a simmering compliance glitch like a public relations headache rather than an actual internal staffing people problem.

He delays disciplinary steps for a popular salesperson who bent the firm’s client onboarding rules then calls a baraza that offers platitudes to the same errant salesperson, while assigning the external legal counsel to rewrite a policy procedure that no one reads in order to keep them still in compliance.

‘This place brings out the best in me,’ says an excited Rikki Stein, a music industry veteran best known as having been the manager of Nigerian Afrobeat legend, Fela Anikulapo-Kuti.

We are literally on the stage at the New Afrika Shrine in Lagos, as a local band belts out an Afrobeat number; this is the sound that Fela bequeathed the world. It is 11 pm, and there is still a long night ahead, as the week-long festival, Felabration, is just getting started.

Each night during the week of Fela’s birthday (October 15) the Shrine is literally a riot of culture: live music, talent shows, fashion, food, and drink, the annual festival started by Fela’s eldest daughter, Yeni, in 1998 to celebrate her father’s legacy. ‘I left here at 3am last night and the party was still bubbling,’ remarks Stein, as he gestures at his reserved space marked Rikki’s Corner. Even at the age of 83, he still gets up to do a jig to the rhythm every so often.

Among the international acts performing at this year’s Felabration was the American singer, percussionist, and activist, Madame Gandhi. The Berklee College of Music graduate in sound design plays a hybrid of pre-recorded electronic beats off her computer with live drums and saxophones.

In July, the musician whose given name is Kiran Gandhi, was the opening act for Femi Kuti during the US leg of his Journey Through Life tour. It is not your classic Afrobeat style, but maybe this fusion of percussion and electronic beats is the direction that the genre will take in the years to come.

According to Stein’s 2024 memoir Moving Music, Femi and his elder sister Yeni conceived the idea of building the New Afrika Shrine as a monument to their father’s memory and to replace the original Shrine that was burnt down during an assault by the Nigerian military in 1977.

Using their share from an advance paid by Universal Music for a licence deal for the release of Fela’s remastered catalogue, they designed and built the ‘perfect club’. ‘Five times the size of the original Shrine.from its façade to its deepest recesses, it is imbued with Fela’s spirit,’ writes Stein.

Right from the street in the bustling Lagos suburb of Ikeja that leads to the New Afrika Shrine, the scene is a frantic hub of activity as food and drink trucks line up the dimly-lit street, pumping loud music while hawkers line the pavements through the night.

The venue itself contains a huge stage, large dancing area, with additional sitting space upstairs. The walls are adorned with portraits of Fela, in a typical defiant pose, along with those of other revolutionaries like Patrice Lumumba, Thomas Sankara, Nelson Mandela, Kwame Nkrumah, Marcus Garvey, and Fela’s mother, Funmilayo Ransome-Kuti. The matriarch was a fierce pan-African activist in her own right who championed women’s political and economic rights.

Across the city’s island, the Afrobeat Rebellion: Fela Anikulapo-Kuti, an exhibition that was first mounted at the Philharmonie de Paris in 2022, has come home to Lagos to coincide with Felabration.

Lead curator Seun Alli and her team, with the support of the Kuti family, have reimagined the exhibition for the local audience. ‘This is an important exhibition to understand the life and times of Fela, says Femi, as he gets on stage, to perform at the Ecobank Pan African Centre, which hosts the exhibition until December 28, 2025. The performance had been organised for delegates attending the Forum Creation Africa led by Nigerian Minister for Art, Culture, Tourism and Creative Economy Hannatu Musawa and French Foreign Minister Jean-Noël Barrot.

Femi’s Positive Force is an elaborate group, reminiscent of his father’s band, complete with a horn section, guitars, percussion, and three female dancers in bright multicoloured costumes. He switches between the alto-saxophones and keyboards, instruments that he started playing in his father’s band at the age of 16.

‘I am 63 and completely satisfied. I’ll go down with a smile,’ he says in some of the banter between songs in the course of his 45-minute set. His set is a career retrospective, from the potent political anthem Truth Don Die to crowd favourite Beng, Beng, Beng, to Work on Myself from his latest album. ‘When we write, we don’t listen to our own lyrics,’ he says while introducing the latter. ‘If I can change myself, become a better father, musician, and have more humility, be serious with work, then the change begins there.’

The exhibition itself is an outstanding multi-sensory timeline through Fela’s life, his music, and his politics, packed with letters, photographs, magazine and newspaper clippings, vinyl records, audio-visual, and instruments like the massive Gbedu drum from Fela’s Yoruba community that he introduced to his band in the 1980s

Visitors see his costumes, notably the trademark embroidered jackets, and in a hilarious twist, a section dedicated to the underwear that Fela was often pictured wearing when holding court in his self-proclaimed Kalakuta Republic.

It is left up to Femi to sum up his father’s idiosyncrasies: ‘Was Fela perfect? I’ll never lie that he was. But he was a genius, and God gave him the ability to write songs that are monumental, historical.’

My brief in this space is to comment on topical business and economic issues. But I would be burying my head in the sand if I didn’t say something about Mr Raila Odinga, who passed on in India last week – an event already rippling through boardrooms and markets alike.

Indeed, this is one of those rare moments when commentary in the business and economics space isn’t a digression but almost a duty – because this passing will ripple across many sectors.

The expiry of the African Growth and Opportunity Act (Agoa) on September 30, 2025, closed a chapter in US-Africa trade relations that began in 2000. For 25 years, Agoa functioned as a preferential market access gateway to the US for qualifying sub-Saharan African countries.

Its termination, abrupt in its immediate effects and uncertain in its future trajectory, has triggered alarm across governments, exporters and workers whose businesses were built around duty-free access to the vast US market.

At the same time, the African Continental Free Trade Area (AfCFTA), the continent’s flagship integration project, is still trying to find its operational stride. The intersecting forces of Agoa’s end and AfCFTA’s slow start create both short-term shocks and long-term opportunities. News reports and government statements in the last days of September 2025 warned of potential job losses in the tens to hundreds of thousands, particularly in concentrated apparel hubs. Employers facing sudden demand contraction may cut shifts, lay off workers, or close facilities altogether.

The termination raises the business risk premium for investors considering African light manufacturing. Importers that rely on secure, long-run preferences may shift production to countries with more predictable access, accentuating capital flight or investment freezes.

The aggregate macro effect could be lower export earnings, higher unemployment in affected towns, and a weakening of nascent domestic industrial linkages that had begun to form around export hubs.

If Agoa’s end is a shock, the AfCFTA that has been formally operational since 2021 and ratified by over 50 African states is the continent’s most credible platform for a collective response. Five years into implementation, AfCFTA’s results are mixed. Why has it had a slow start?

Africa’s transport and logistics networks are fragmented and expensive. Poor roads, congested ports, slow border procedures, and weak customs cooperation hamper intra-African shipping and raise transaction costs, undermining trade even where tariffs have been reduced.

Overlapping regional blocs, divergent standards, and differing national regulations create unpredictable trade friction. Companies attempting cross-border trade encounter dozens of different procedures and certifications.

Negotiated phasing, special treatment for sensitive sectors, and long transition periods for some member countries mean that full tariff liberalisation is slow because many products remain on exclusion lists or protected schedules.

Many countries lack sufficient upstream producers, finance, and standards compliance to support cross-border value chains. Without firms that can source inputs regionally, tariff liberalisation alone will not spark rapid intra-African trade.

Implementing AfCFTA requires harmonised customs systems, dispute settlement, rules of origin frameworks, and enforcement. This is a heavy coordination task for 55 states with different capacities and priorities. Progress is uneven and often dependent on donor-funded technical assistance.

These obstacles explain how AfCFTA, despite wide ratification, still sees intra-African trade levels well below the intra-EU or intra-ASEAN comparatives thereby leaving a gap that Agoa has helped to fill for some exporters.

However, it can be leveraged purposefully to soften the Agoa shock and create more resilient, African-centered value chains. Going forward there are a few practical proposals.

Encourage apparel and agro-processors to re-source inputs regionally so that margins are captured inside Africa. The AfCFTA Guided Trade Initiative has already piloted tariff concessions for selected products and scaling this could create viable intra-African supply webs that substitute some lost US demand.

Complex or lengthened rules of origin hamper firms that previously relied on Agoa’s simpler regimes. AfCFTA institutions should prioritise simplified, predictable rules for sectors displaced by Agoa’s end and coordinate mutual recognition of standards.

African institutions, notably regional development banks and national export-promotion agencies, should provide bridge financing, export credits and working capital to affected factories to avoid mass layoffs while firms retool for regional markets. Public procurement can also be used to guarantee demand during transition.

Investment in ports, rail corridors, and single-window customs systems reduces trade costs. Donor programmes and public-private partnerships must be redirected to fast-close critical bottlenecks that make intra-continental trade commercially viable.

Exporters need help upgrading to meet regionally harmonised standards. Technical assistance for factory modernisation, quality labs and workforce skilling will raise the competitiveness of African manufacturers across African markets and beyond.

African negotiators should pursue reciprocal, rules-based agreements with major partners not to replicate Agoa but to secure access that is more predictable over the medium term. While AfCFTA builds continental market capacity, parallel diplomatic efforts can stabilise external demand as industries transition.

Political economy: windows of urgency and opportunity

AGOA’s expiry is a political inflection point. For governments, private sector actors and multilateral partners, the question is how quickly Africa can convert short-term emergency responses into durable industrial strategy.

AfCFTA offers the institutional architecture but only if its operational deficits are treated with urgency and financed at scale. The alternative is prolonged deindustrialisation in places that had just begun to industrialise.

Agoa’s termination is a shock, not the end of Africa’s trade story. The continent must not treat the loss of US preferences as solely a diplomatic challenge; it is a policy design, industrial strategy and infrastructure challenge. AfCFTA will not fully substitute the US market overnight, but it is the most powerful endogenous mechanism Africa has to create larger, denser regional markets that can absorb productive capacity, build value chains, and reduce vulnerability to unilateral preference shifts.

Success demands accelerated AfCFTA implementation from simplified rules and targeted finance to hard logistics investment and urgent international cooperation to ensure a soft transition for workers and exporters.

If African governments and partners respond with coherent, well-funded strategies, the end of Agoa could become the painful catalyst for a more self-reliant, regionally integrated industrialisation.