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Make Africa Great Again – what could go wrong?

African governments gleefully embrace trade bans to build domestic champions in the green economy

June 12, 2025

Welcome to Green Rising – Fences may make good but rarely prosperous neighbours, regardless of what Donald Trump says. 

And fences are springing up all over Africa’s green economy. Leaders are falling in love with trade restrictions to boost domestic manufacturing. 

Green sectors such as electric vehicles and renewable energy have shown the potential for local assembly or even full production. Governments hope for jobs and taxes and growth.

  • Nigeria has banned the import of certain solar panel parts… to spur domestic production. 

  • Ethiopia banned the import of vehicles with an internal combustion engine… to foster EV manufacturing at home. 

  • Rwanda banned certain vehicle imports, following a protectionist trend among African governments. 

There is a certain logic to import restrictions: Africa rightly wants more than just clean air from the green economy. It also expects a greater measure of prosperity. And selling solar panels or EVs is not nearly as enriching as also manufacturing them. 

How to get there? Demand is healthy and growing for many green economy products. 

If governments now keep out foreign suppliers, domestic companies have a better chance to gain market share, and generate jobs and profits. 

  • Nigeria leaders envisage thousands of unemployed youths making solar panels. 

  • Ethiopian officials plan for countless electric motorcycle factories along the Nile.

  • Rwandan visionaries dream of local supply chains in the country of 14m people.

On top of that, local currencies may stand to gain in countries with trade restrictions. 

Buying fewer imports means holding on to more dollars and putting less pressure on the value of money in citizens’ pockets. 

African governments are not the first developing country leaders to try and create industrial champions by giving them a protected market at home. 

This is how Asia and especially China grew to current riches. But also Korea. And before that Japan. 

Trade restrictions were a key part of their game plan, especially early on in their industrial rise.

They also put up more subtle barriers than outright bans or high tariffs. 

Complex licenses, preferential loans, currency manipulations, onerous registration schemes, obligations for local partnerships, insistence on tech transfers. 

This game is as old as trade itself. When European cities built moats many centuries ago, it wasn’t just to keep out marauders but also traders from beyond the hills. 

Alas, the prosperity game is not that easily won, as African leaders may soon find out. 

The day will come when domestic companies have to compete with foreign competitors. They can be kept out for a while. But eventually the doors will be pried open again – as happened in Asia. 

Domestic companies want to export. Africa already sells fossil fuels and agriculture products outside the continent. That’s a reciprocity arrangement. When foreign sellers find closed doors, they nudge their governments to close doors to African goods. 

The reason Asia succeeded nonetheless is its products eventually became superior to foreign ones. So the question for African governments is not: Can you keep out the competition? (Answer: Yes in the short term, no in the long term.) 

Instead they should ask: When foreign competitors come, will our companies be able to compete then? Governments can delay the start of competition. But it will come. And if local champions fail then, the country will have wasted both capital and momentum.  

What Nigeria is doing – banning the import of solar panels – is the most problematic. 

What Rwanda and Ethiopia are doing is subtler: They’re keeping out new fuel vehicles to boost EVs. They’re not banning foreign EVs – yet. But it’s a step controlling leaders will be tempted by when their domestic champions struggle, compounding the pain to be expected later. 

How much value are governments really adding by reducing competition in order to have bits of steel bent at home…? And at what cost? 

Remember the buyers, the customers: What do they want? Affordable products. If China is better able to deliver them, customers benefit from trade, and with it potentially the economy. 

To create a few manufacturing jobs, African governments may be in danger of choking off a great engine of progress. An energy transition and a vehicle revolution, powered by foreign imports, may be worth more than a few home-grown factories. 

Not every country in Europe makes cars or wind turbines either. 

It would be deeply ironic if Trumpian trade idiocy was copied wholesale in Africa.

A helping hand from the state can be very nice… it can also distort markets horribly. 

A high-degree of technical and economic expertise is needed if African governments want to create domestic champions. China has shown it is possible. Africa too can do it. But it requires a lot more than imposing bans and leaning back. 

If Nigeria is going to accelerate the domestic solar market by banning imports, it better also fix other things that hurt importers less than manufacturers, who need reliable grids, highly trained staff, suitable regulations. 

And how about a less predatory state that enables industry rather than feasting on it?

Still, you’ve got to start somewhere. If trade restrictions are modest and temporary, sure. But beware of the Trump trap… leading a nation towards hating trade. 

Number of the week 

… humans were displaced in Africa in 2024 due to extreme weather linked to climate change, up from 6 million in 2023. Floods have caused 30 million displacements in the past decade. East and Central Africa were hardest hit, with vulnerable groups such as women and children most affected.

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👉 Kenya’s Boma Yangu Estate named Africa’s first EDGE-certified green building for optimal building orientation.

EVENTS UPDATE 

📆 Attend the Lagos Startup Week in Nigeria (July 7)

📆 Participate in the Food Systems Summit Stocktake in Ethiopia (July 27)

📆 Join the Clean Energy Australia-Africa Conference in Kenya (July 31)

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