China recently announced a landmark policy that grants tariff-free access to 53 of Africa’s 54 nations.

It’s a move that promises to reshape trade dynamics across the continent. Yet beneath the veneer of open markets lies a complex web of structural deficits, mounting debt, and the risk of entrenching Africa’s role as a mere raw-material supplier.

In the first of a two-part interview with Crux Now, Professor Franklin Nnaemeka Ngwu, a renowned expert in Strategic Management and Governance at Lagos Business School and an Independent Non-Executive Director of Caritas Nigeria, offers a sobering analysis of the new trade dynamic.

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Arguing that the removal of tariffs is a “powerful pull factor” that must be countered by robust internal “push factors,” Professor Ngwu examines the structural hurdles that prevent Africa from capitalizing on this opportunity.

From the risks of a widening trade deficit and the specter of a “circular debt trap” to the ethical imperative of mutual benefit, he challenges African leaders to move beyond rhetoric and take responsibility for building the industrial capacity needed to translate trade policy into genuine development.

Following are excerpts of that conversation….

Crux Now: How does Africa ensure that this Chinese tariff-free policy actually leads to industrialization in Africa rather than just cementing Africa’s role as a raw material supplier?

Professor Franklin Nnaemeka Ngwu: China’s zero-tariff policy is a powerful pull factor that must be matched with internal push factors to industrialize the region. African states must shift from exporting raw materials to processed goods by establishing and/or strengthening Export Processing Zones to attract local firms as well as Chinese light-manufacturing firms seeking lower labor costs.

These zones must be endowed with locational advantages, high-quality infrastructure and relevant services and institutions that will enable them to meet the global quality and packaging standards, export finished goods to China at 0% duty and create jobs, increase productivity and increase tax revenues.

AfCFTA must be effectively integrated to build regional value chains since no single African country has a sufficient industrial base. In addition, the regional supply chains should be interconnected to cut costs and increase competition. The leaders of African nations also need to negotiate strategically for Chinese investment that will promote technology transfer and upskill locally employed workers.

Finally, industrial enabling infrastructure, such as a stable power supply and safe, efficient transport systems, must be provided by African governments to enable African firms to compete favorably in the Chinese market.

China exports $225 billion to Africa while importing only $123 billion, creating a massive deficit for the continent. Does simply removing tariffs go far enough to correct this imbalance, or is this policy merely a band-aid on a structural wound?

The policy cannot correct the trade imbalance in the short run. Currently, African nations majorly export raw materials to China, while China, in turn, exports processed goods, machinery, electronics, and industrial inputs to Africa at highly competitive prices. This policy will automatically give China enormous advantages over African nations. It will make Chinese goods cheaper in the African market, enabling them to penetrate more markets across the African continent and, in turn, export more goods into African nations.

This may possibly discourage local firms and start-ups that are still struggling to compete with China’s scale and efficiency. The implication is that African imports will exceed its exports to China.

The trade imbalance can only be corrected in the medium to long run, and this will require African leaders to address the factors responsible for the current low production capacity, including weak infrastructure and industrialization, poor production methods and technologies, and lack of export diversification. Earlier in the year 2025, the UN Conference on Trade and Development further reiterated that African countries had “no choice” but to diversify their exports, strengthen transport and digital infrastructure, adopt sound fiscal policies, and attract the specific investments necessary to mitigate vulnerability and build resilience.

If all these problems are resolved, local industries will be in a better position to compete effectively, the continent will attract more investment from China, production capacity in African countries will improve, and more processed goods will be exported to China to correct the imbalance.

In your experience, how significant are non-tariff barriers (such as sanitary standards, bureaucratic red tape, or rules of origin) in preventing African goods from accessing Chinese markets? If tariffs are gone but these barriers remain, is “zero-tariff” effectively a hollow promise?

Empirical studies have shown that non-tariff barriers, including customs bureaucracy, rules of origin and sanitary and phytosanitary standards, contribute significantly to the high cost of intra-African trade. Of course, AfCFTA has a system in place to enhance intra-African trade by removing non-tariff barriers to trade (NTBs), but have they been able to eliminate these barriers? The answer is no.

So, if these barriers are issues within African countries, you will agree with me that they would make many products uncompetitive and certainly hinder the flow of African goods to Chinese markets. In short, the zero-tariff will remain an effectively hollow promise, and shallow integration.

The free flow of African goods to the Chinese market requires deep integration, which can only be achieved by eliminating the non-tariff barriers mentioned earlier, including weak transport infrastructure and Chinese technical regulations.

Many African nations owe Beijing billions in debt repayments. There is a concern that increased trade without debt relief simply serves to service these loans rather than develop local economies. Does this new policy do anything to alleviate the debt burden, or does it risk entrenching a cycle of dependency?

The United Nations’ Office of the Special Adviser on Africa estimated African nations’ external debt at over $650 billion, including debt owed to Beijing, as of 2024. In the same vein, the African Development Bank’s records showed that Africa paid about $163 billion in debt service in the same 2024.

Recently, the former Deputy Chairperson of the African Union Commission (Erastus Mwencha) attributed Africa’s underdevelopment to debt servicing. So, without debt relief or restructuring, the zero-tariff policy may push African countries toward a circular economy of debt trap, in which foreign exchange earnings from trade are used to service debts rather than being channeled into infrastructure and social services that aid economic growth and development. In other words, the debt burden will remain a pain in the African system without debt relief.

The financial dependence or debt profile of African nations on China may even worsen if there are no strategic efforts to metamorphose from a raw-material exporting region into a manufacturing region, diversify African exports, revive the already deteriorated infrastructure, promote industrialization, and address other structural issues.

As a Catholic focused on justice, how do you view the ethics of this relationship? Is it a genuine partnership for development, or does it resemble “debt-trap diplomacy” where the lender dictates the terms of engagement to the detriment of the borrower’s sovereignty?

The Biblical principles of justice include honesty, fairness, mutual benefit, a desire for human good, and a long-term interest in human development rather than relationships of dependency or extraction. So, from a Christian perspective focused on justice, it would be difficult to conclude now that the relationship aims to promote development, or that China is pursuing any hidden agenda, such as debt-trap diplomacy.

If African nations are regarded as “economically vulnerable states”, the question we need to ask, even before agreeing to the policy, is what factors make African states economically vulnerable? After identifying these factors, we need to address them to maximize trade benefits, promote economic development and boost the quality of life. If all the issues highlighted earlier are effectively addressed, then the relationship can be regarded as a genuine partnership for development, because foreign earnings can be channeled towards human and infrastructural development to make Africa to be economically independent, instead of prioritizing servicing debt owed to Beijing.

If African governments do nothing, the relationship will conflict with the Christian focus on justice and possibly lead to mineral colonialization and mirror debt-trap diplomacy. But this is not their fault; it is our fault. Please take note, they didn’t force us to take loans from them. So, we must take responsibility as a continent.