Loading ...America’s tariff wars present no upside opportunities for African economies
The tariff’s most important negative impact will be via the coming global economic slowdown
Amid the turmoil in global markets caused by America’s protectionist turn, there have been attempts across Africa to put a positive spin to the chaos. For instance, Kenya’s Ministry of Trade & Industry issued a statement arguing that it remains a competitive frontier market destination for FDI because it only got hit with a 10% tariff. Others noted that African countries’ low trade volumes to the U.S. mean that they’ll be shielded from the worst effects of the tariffs. Yet others have argued that this is an opportunity for African states to make bilateral trade deals with the United States.
All this to say that African policymakers must remain grounded in their reactions to the coming tariff wars, and subsequent shifts in patterns of global trade. They must not pretend that things were fine before the current shock and avoid being sidetracked by time-inconsistent deals (At the moment the U.S. government is nothing but a haven of policy instability).
What is clear, however, is that countries that fail to invest in strategic resilience will be exposed to the worst consequences of these upheavals; and with no chance of finding protection within institutions of global governance. African countries must avoid this fate at all cost.
https://www.africanistperspective.com/p/americas-tariff-wars-offer-little
Given that the world will soon be facing sovereign defaults once again its the downside that African nations will want to be wary about. Luckily for most here they are already unbanked. About half of African citizens have no cash in the banks and most distrust the sector anyway. More commonly people self bank or go with self custodianship of their savings so bank closures will have only muted effects here. Its the wealthy and middle income countries who are really in trouble this time around.
“the wealthy and middle income countries” are also up to their eyeballs in personal debt – living a lifestyle they otherwise could not afford – am I correct in assuming that this is not occurring in Africa (or is it somehow funded differently)??