The African Development Bank (AfDB) has said that the trade war between U.S. and China and United Kingdom and the European Union crisis pose risks to Africa’s economic prospects.
According to Akinwumi Adesina, president of the AfDB, the Us –China trade war has brought troubles in global markets and unnerved investors.
Meanwhile, the withdrawal of the United Kingdom from the European Union on October 31 without a transition deal could severely disrupt trade flows things that several economists fear.
During the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam on Saturday, Akinwumi Adesina, president of the AfDB, told Reuters that the bank could review its economic growth projection for Africa – of 4% in 2019 and 4.1% in 2020 – if global external shocks accelerate.
“We normally revise this depending on global external shocks that could slow down global growth and these issues are increasing by the day,” Adesina told Reuters.
“You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.”
Akinwumi Adesina noted that African nations need to boost trade with each other and add value to agricultural production to cushion the impact of external shocks.
“I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen significantly and so the demand for products and raw materials from Africa will only fall even further,” he said.
“It will also have another effect with regard to China’s own outward-bound investments on the continent,” he added, saying these could also affect official development assistance.
Adesina said a continental free-trade zone launched last month, the African Continental Free Trade Area could help speed up economic growth and development, but African nations needed to remove non-tariff barriers to boost trade.
“The countries that have always been facing lower volatilities have always been the ones that do a lot more in terms of regional trade and do not rely on exports of raw materials,” Adesina said.
“The challenges cannot be solved unless all the barriers come down. Free mobility of labor, free mobility of capital and free mobility of people.” He concluded
Source
