Trump’s Trade Tariffs: What World Bank Wants African Leaders To Do
As they say in the economic circle, when America sneezes, everyone catches cold.
That’s pretty what has happened with Trump’s tariffs which has left several economies badly impacted.
To curtail this impact, the World Bank has some piece of advice for African countries.
The developmental lender wants Africa to trade more with itself if it ever intends to survive the trade war between America and China and even pretty much the rest of the world.
That sounds like a wise counsel, because Africa hadn’t been trading much among itself.
In fact, recent statistics show that Africa’s portion of trade within the continent declined to 14% of the total $907.6 billion trade with the rest of the world.
“The region may need to expand market access to absorb the costs arising from the hike in tariffs,” said Hafez Ghanem, who is World Bank Vice President for Africa, in an interview on Thursday in Nigeria’s capital, Abuja.
“This would include strengthening trade among Africa countries,” he added.
The extent of the impact will depend on the size and pattern of trade countries have either with the US or with third-party nations that trade with it, Ghanem said.
China, upon which the US has imposed billions of dollars of duties, was sub-Saharan Africa’s biggest trading partner last year at about $120 billion.
“Take South Africa for instance: the possible imposition of a tariff on imported cars from Asia may affect the international supply chain of the steel industry and Asia, in general, remains the main export destination of South Africa’s iron and steel products,” Ghanem said.
“Tariffs may also affect export volumes of non-oil exporting countries in the region, which typically sell apparel, agricultural and other manufactured edible products abroad.”
South Africa, Namibia and Nigeria accounted for more than 35% of intra-Africa trade last year. South Africa contributed a quarter of the region’s domestic commerce in 2017, mostly in oil imports from Nigeria and Angola.