“IMF Warns of Sub-Saharan Africa’s Vulnerability to China’s Slowing Economy”

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The International Monetary Fund has warned that the slowing Chinese economy will have a significant impact on the growth of Sub-Saharan Africa. According to a recent report by IMF economists, a one percentage point decline in China’s real GDP growth rate results in a 0.25 percentage point decline in Sub-Saharan Africa’s overall GDP growth within a year, with the most substantial effects felt by oil-exporting countries.

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China’s economic growth has notably decelerated due to factors like a property market downturn and the lingering effects of the COVID-19 pandemic, with forecasts indicating an expected annual growth of around 4% for the remainder of the decade, down from the pre-pandemic 7% rate.

The IMF highlighted that the region’s dependence on exports, particularly of commodities such as oil, makes it vulnerable to the consequences of China’s slowdown. While non oil-exporting countries would also experience a growth slowdown, the impact would be comparatively lesser, with a 0.2 percentage point decline in GDP growth from a one percentage point reduction in China’s growth.

Additionally, the report emphasized the declining trend in Chinese lending and direct investment to Sub-Saharan Africa since 2017, urging the region to proactively adapt to these changes. The IMF recommended a shift towards fostering intra-African trade and boosting investments in infrastructure and human capital. Moreover, it highlighted the issue of high-interest commercial borrowing, constituting about half of the region’s public debt, and pointed out that China’s share in Sub-Saharan Africa’s sovereign debt stands at 6%, concentrated in Angola, Kenya, Zambia, Cameroon, and Nigeria.

The report clarified that the surge in the region’s public debt over the past 15 years was not primarily driven by debt owed to China.

Gbenga Samson
Gbenga Samsonhttp://ThisDayLive.com
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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