#15 Betting on Growth

AGOA Renewal

🇿🇦 How South Africa Hopes To Secure AGOA Renewal Amid Tariff Row

South Africa is pushing hard to tie into a U.S. trade extension of AGOA, even as Washington imposes 30 percent tariffs on its exports.

The African Growth and Opportunity Act (AGOA) has long underpinned trade between sub-Saharan Africa and the U.S., granting duty-free access for eligible goods. But as its expiration looms, South African Trade Minister Parks Tau is touring Washington to negotiate an extension and relief from steep tariffs imposed in August (up to 30 percent). Tau and his counterparts believe Congressional bipartisan support exists, but they accept AGOA might only be renewed for 1–3 years as a stopgap while Congress debates deeper reform. Many African exporters warn that without AGOA, average U.S. tariffs would jump, especially for apparel and agricultural products, from near zero to 15–20 percent or more.

To cushion the blow, some analysts argue AfCFTA liberalization could absorb the shock — intra-African trade expansion may partly offset lost U.S. access. But AfCFTA is still nascent, and many firms rely heavily on U.S. markets. Meanwhile, South Africa is also pushing for tariff reductions specifically for its goods, not just a blanket extension. The stakes are high: export jobs, industrial strategy, and fiscal stability hinge on how smoothly AGOA is extended and reformed.

The stakes are high: export jobs, industrial strategy, and fiscal stability hinge on how smoothly AGOA is extended and reformed.

South Africa’s negotiating gambit could safeguard vital trade links — but only if Washington responds. The joint fate of U.S. markets, African exporters, and regional trade integration now hinges on AGOA’s renewal terms.

Manufacturing Rebound

🇿🇦  South Africa’s Manufacturing Sentiment Is Recovering, But Risks Linger

South Africa’s Absa PMI rose to 52.2 in September, signalling manufacturing expansion, yet logistical stress and external pressures cast long shadows over the upswing.

South Africa’s industrial sentiment appears to be rebounding. The Absa Purchasing Managers’ Index (PMI) jumped to 52.2 in September from 49.5 in August — only the second time in 2025 that it has breached the 50 threshold that signals expansion.

The rise was led by stronger domestic demand and higher new orders, but supply chain pressures remain palpable: delivery times remain sluggish, and respondents flagged persistent delays tied to port congestion and bureaucratic export processes. Global headwinds — especially 30 percent U.S. tariffs on South African exports — continue to weigh on export prospects.

Critically, while firms report rising activity, their expectations for the next six months dropped sharply, suggesting that the current rebound may be fragile. Analysts warn that if tariff pressures or energy constraints intensify, the sector could slip back into contraction.

To sustain momentum, structural reforms in logistics, trade facilitation, and energy reliability must accompany cyclical recovery. The freight and rail reforms announced by the state offer promise — but only if implemented in time. The broader lesson: sentiment indices can mask underlying fragility. South Africa’s industrial economy is walking a tightrope between rebound and relapse.

The sentiment surge is encouraging — but not irreversible. Without reforms to address supply bottlenecks and external tariff shocks, the uptick may prove a temporary reprieve, not a turning point, for South Africa’s manufacturing sector.

Oil Regulation Reform

🇳🇬 What Nigeria’s Push for Unified Oil Regulation Means for Africa

Nigeria is spearheading a continent-wide effort to harmonize oil regulation via AFRIPERF, aiming to attract investment and reframe Africa’s energy governance.

AAfrica’s energy future is often fragmented: national rules, varying standards, and disparate legal regimes. Nigeria aims to change that by launching the African Petroleum Regulators Forum (AFRIPERF), which aims to bring 16 countries together to standardize regulation, enhance transparency, and reduce investment risk. The charter was signed in Accra, with backing from Ghana, Somalia, and other states. The forum will include an executive board and technical committees focused on emissions, cross-border gas flows, digital compliance, and licencing alignment. Nigeria argues that with common regulatory benchmarks, Africa becomes a more cohesive and attractive energy bloc. It may reduce “regime risk” perception among global investors, ensuring licensing rules, royalties, and environmental obligations are predictable.

Challenges remain: countries must cede some sovereignty over regulation, and enforcing convergence could be politically contentious. Oil majors may resist less flexible regimes. But if it works, AFRIPERF could help Africa capture higher value from its resources and reduce duplication, costly regulatory divergence, or “regulation shopping.” It might also reshape Africa’s bargaining position in global energy diplomacy — enabling African states to negotiate as a bloc, not fragmented relics of colonial carve-ups.

AFRIPERF isn’t just a regulatory toolkit — it’s an experiment in regional sovereignty and energy unity. If successful, it could transform Africa’s role in global energy markets, turning fragmentation into competitive coherence.

Tourism

🇦🇪  When the UAE invites Africa: Tourism as Soft Power

The UAE will host its first Africa tourism investment summit in October, signaling a strategic push to merge economic diplomacy and soft power across continents.

On October 27, 2025, Dubai will host the inaugural UAE–Africa Tourism Investment Summit, under the broader FHS World 2025. The event hopes to link capital seekers in African tourism with global investors and position the UAE as a gateway for investment into Africa.

Tourism has become a growing lever for Africa’s development — combining infrastructure, green growth, and local value chains (Something we’ve enumerated previously in this edition : Africa’s Tourism problem). But many projects suffer capital gaps, weak regulatory frameworks, or fragmented markets. The summit intends to address those gaps through blended finance, PPPs, and cross-border investment facilitation.

Beyond economics, the summit is a soft power play: the UAE is repositioning as an African partner (not just Gulf neighbor). It aims to deepen diplomatic ties, foster people-to-people flows, and align with Africa’s development narratives. It may also help African states diversify away from extractive foreign investment models.

But challenges loom: ensuring sustainability, preventing overtaken by foreign developers, and aligning projects with local needs. The success of this summit will depend on whether it catalyzes real capital flows and durable institutional linkages — not just high-profile announcements.

The UAE’s tourism summit is more than business; it signals a new diplomatic posture toward Africa. If investment flows match ambition, it could reshape Africa’s tourism financing model and diplomatic relations across continents.

Infrastructure Investment

🇲🇦🚅 Morocco’s Bet on Rail to Fuel Growth

Morocco is investing billions into rail infrastructure, positioning itself as a regional hub and betting that rail connectivity will spur trade, tourism, and integration.

Ohe Moroccan government has launched multi-billion-dollar rail infrastructure projects, including high-speed rail expansion and cargo corridors connecting Casablanca, Marrakech, and Agadir. The flagship project: extending the Al Boraq high-speed line, Africa’s first, to new cities.

Officials argue rail expansion is essential for climate-friendly transport and to anchor Morocco’s position as a logistics bridge between Europe and Africa. The plan also includes modern freight corridors linking to Tangier Med port, Africa’s largest container hub.

Beyond economics, this strategy has geopolitical undertones. By investing in high-capacity, low-carbon connectivity, Morocco signals its ambition to become a Euro-African transit state, drawing manufacturing and logistics FDI.

Challenges remain: financing the projects amid fiscal strain, land acquisition disputes, and balancing high-speed priorities against rural connectivity gaps. Yet if successful, Morocco could anchor a regional transport revolution — echoing 19th-century rail booms that transformed economies.

Morocco’s rail gamble is more than infrastructure. It is nation-branding, climate policy, and geopolitical leverage rolled into steel tracks. Success could redefine Morocco as a continental logistics powerhouse.

Tourism

🐪 GCC “Shengen-style” Unified Tourist Visa

A single visa to visit all six GCC countries (UAE, Saudi Arabia, Qatar, Oman, Bahrain, Kuwait), designed to supercharge multi-country travel and cross-border business.

It turns a region into one seamless travel market, lowering search/friction costs for tourists and investors—much like Schengen did for Europe—while nudging policy coordination on data-sharing, security screening, visitor insurance, and consumer protection.

How it works :

• Common entry permit + shared watchlists & data pipes across immigration systems.

• Coordinated fee/length-of-stay rules; likely phased with a pilot before full rollout.

• Tourism-facing complementary measures (air connectivity, hotel classification, events calendars).

Analysts expect Saudi Arabia to be the earliest big gainer because of recent capacity additions (rooms, airports, giga-projects) positioned to capture multi-stop itineraries across the Gulf.

AI as Growth Policy

🇰🇷֎ South Korea Bets its Future Growth on Generative AI

acing sluggish growth and global headwinds, South Korea is making AI investment its top policy priority — launching 30 flagship projects and mobilizing huge funding.

South Korea’s new administration has elevated artificial intelligence to a national strategic imperative. Amid downward revisions to its 2025 growth forecast (now ~0.9 %) and shrinking export momentum, AI is being positioned as the lever to reset productivity, industrial competitiveness, and regional tech leadership. The government plans to roll out 30 major AI and innovation initiatives in the second half of 2025, spanning robotics, chip design, autonomous systems, smart appliances, drones, and advanced materials. To support these, it is establishing a 100 trillion won fund in public–private partnership, coupled with tax incentives and regulatory easing in core sectors.

Crucially, the policy taps into Korea’s strong industrial base and existing tech ecosystem: it aims to integrate AI into established sectors (automobiles, shipbuilding, electronics) rather than rely solely on startups. This hybrid “deep AI + heavy industry” posture sets South Korea apart from nations emphasizing pure software ecosystems.

Risks abound: misallocation of capital, regulatory lag, skill shortages, and possible overemphasis on flagship “moonshots” over foundational capacity building. Success will hinge on whether policies sustain support for smaller firms, AI ethics & oversight, and seamless coordination across ministries.

South Korea is doubling down on AI as a growth engine. If the strategy works, it could recenter industrial advantage in Northeast Asia. But its fate depends on implementation, human capital, and whether AI gains diffuse broadly — not just among giants.

Global AI Regulation

֎🤖🦾 Who sets the Rules for AI ? China’s Push for a Global Governance Body

IIn a bold diplomatic move, China has proposed establishing a new global AI governance organization, positioning itself as a rule-maker in the AI era.

At the 2025 World Artificial Intelligence Conference in Shanghai, Chinese Premier Li Qiang unveiled a 13-point plan advocating for an international institution to oversee AI governance. The proposal calls for open-source sharing, safety standards, multilateral dialogues, and a UN-anchored structure to address AI’s cross-border risks. China’s rationale is twofold: to fill the vacuum in fragmented global AI regulation and to shape rules in a way that aligns with its strategic and technological interests. The proposal implicitly challenges U.S.-led norms and aims to anchor China as a standard-setter.

Critics argue that China’s institutional ambitions may mask soft power projection or regulatory leverage: who controls the new body, how it handles transparency, and whether it privileges certain model architectures will matter. Also, the balance between openness and national security in AI is delicate: too much openness risks misuse, too much control stifles innovation. Still, the move is significant: it signals China’s confidence to not only compete technologically but to institutionally re-engineer the global order around AI. Whether states or private actors rally behind or resist will test the idea’s viability.

China’s AI governance proposal is more than diplomacy — it’s a bid to shape the architecture of future digital norms. The question now: will others coalesce around this vision or preserve a fragmented multipolar AI order?

Deregulation

📜 Asia and Europe are Loosening Insurance Rules to Jumpstart Growth

Regulators in Asia and Europe are softening capital requirements and investment rules in insurance sectors — aiming to unlock growth and financial liberalization.

Faced with economic headwinds and sluggish credit growth, insurance regulators across parts of Asia and Europe are proposing relaxed capital buffer rules, more flexibility in investment rules for insurers, and easing constraints on product design.

The recalibration is rooted in a logic: insurance players have capital, balance sheets, and long-term horizons; enabling them to undertake infrastructure or sustainable investments can multiplier effect through credit and risk markets. Looser rules may permit insurers to allocate more to equities, green bonds, or strategic assets.

Some jurisdictions are simultaneously reviewing solvency norms (less procyclical buffers) and constraints on reinsurance. Others plan stress tests adjusted for climate shocks, integrating risk models that permit longer-term investment horizons. The idea is a calibrated liberalization that encourages investment without endangering policyholder safety.

Critics caution that loosening rules risks systemic fragility, insufficient buffers, and “search for yield” behavior. Regulators must embed countercyclical safeguards, dynamic supervision, and macroprudential backstops. The balance is delicate—but the move reflects how financial regulation is shifting from pure prudence to developmental activation.

Insurance deregulation as industrial policy — that’s the bet. If regulators calibrate well, this could unlock new growth capital while preserving stability. It’s a test of whether finance rules can be both safe and catalytic, not just risk-averse.

Where are the Funds ?

💰⚖️ Climate Finance Justice

At the 2025 UN General Assembly, developing countries sharply criticized wealthy nations for failing to deliver on climate finance pledges, demanding accountability now.

In New York, leaders from small island states, African nations, and other vulnerable countries united in a blistering critique: developed nations have repeatedly broken their climate finance promises enacted in prior COP agreements. The $100 billion annual goal — long delayed and underdelivered — continues to trigger mistrust and frustration.

The Marshall Islands’ President warned that sea-level rise is already forcing migration. Ghana’s President John Mahama linked climate shocks to fiscal strain and destabilizing migration flows. In response, Germany pledged €11.8 billion in climate aid — a record sum — but many delegations said the increase is still insufficient given current needs.

In a sign of shifting tactics, several coalitions pushed for fast-disbursing grants, not just loans, and easier access to funds (less bureaucracy). Island nations especially pressed for funding that bypasses long conditionality and emphasizes adaptation, loss & damage, and scalable resilience investments.

The atmosphere was one of urgency. With global temperatures already above 1.5 °C and climate damages mounting, the message was clear: incremental gestures won’t cut it. Developing states are demanding climate justice — not charity.

At the UN, the global South made a moral and strategic intervention: climate finance must move from promise to delivery. The coming months will test whether major emitters heed this demand — or further erode trust in multilateral climate governance.