How will a global trade war affect Africa?
The IMF predicts stronger growth for sub-Saharan Africa, but a big trade challenge is looming.
The International Monetary Fund (IMF) has upgraded its growth outlook for sub-Saharan Africa in 2019, citing a recovery in Nigeria. Africa’s most populous country is recovering from its worst contraction in a quarter of a century, thanks to rising prices for commodities like oil.
And there’s a positive contagion effect. In an update to its World Economic Outlook report, the IMF said the sub-Saharan region as a whole is now expected to grow 3.8 percent in 2019. That’s up 0.1 percent compared with April’s forecast.
But there was also a warning about the effect of tit-for-tat tariffs.
“The United States has initiated trade actions affecting a broad group of countries and faces retaliation or retaliatory threats from China, the European Union, its NAFTA partners and Japan, among others. Our modelling suggests that if current trade policy threats are realised and business confidence falls as a result, global output could be about 0.5 percent below current projections by 2020,” said the IMF’s Maury Obstfeld.
China is Africa’s largest trading partner, so if Chinese-made products are hit with US tariffs, there could be a knock-on effect.
So how will a global trade war affect the continent? And how can Africa overcome the reliance on exporting commodities?
“Every war is not good, but from an African point of view, we are very focused on how we can ensure that we continue to participate in global trade,” says Ade Ayeyemi, the CEO of Ecobank Group.
“I am sure they will work it out. We are focused on what we can do to improve … trading among ourselves on the African continent. The intra-African trade is very low … It’s the single biggest opportunity in front of us that we need to realise first.”
Ayeyemi says that “if you look at the rest of the West African, East African and North African countries, there’s enough expertise if we ensure that the market is available for everybody to participate, to ensure that industries can be located in all these countries … We now see an opportunity … trading among ourselves ensures that we can have much more faster growth than we used to have and wealth can be distributed to the best of the economy.”
The world’s first habitable 3D-printed houses
With advances in technology and the advent of 3D-printing, it’s now possible to print a building – causing a stir in the construction industry.
Robotics being available relatively cheaply to a great number of people does have the ability to transform the way the industry operates.
Known in the trade as “additive manufacturing”, 3D-printing was first developed in the 1980s. Due to more sophisticated types of printers, we can now print things like houses, clothes or spare parts for planes.
Not only could it revolutionise the way global goods are manufactured, some say it could change how we live and construct homes. Advocates believe low-cost 3D homes could even help end homelessness.
So how do you print a house? And what are the potential implications for global economics and trade?
Simon Hart, senior Innovation lead at Innovate UK, talks to Counting the Cost.
“3D printing [in construction] is relatively new so the testing is yet to be done. One of the challenges is the longevity, the durability of 3D-printed structures – particularly in areas of harsh climate … flooding and even earthquakes,” Hart says.
“It suits itself quite well to disaster areas or developing nations where the houses can be built very rapidly and built with a minimum of skills. All you actually need is the skilled people to maintain the printer. You are not looking at hiring hundreds and hundreds of bricklayers … And a 3D printer can run 24/7.”
“We’ve got a long way to go,” says Hart. But he believes that “robotics being available relatively cheaply to a great number of people does have the ability to transform the way the industry operates.”
Aeroplanes, e-commerce and flying sports cars
At Farnborough Airshow, the world’s second biggest aviation trade show, US plane-maker Boeing kicked off the event with a $4.7bn deal to sell DHL 14 Boeing 777 freighters.
Peter Morris, chief economist, Flight Ascend, talks to CTC about the global air freight demand.
“When you’ve got threats of global trade slowdown and global trade confrontations between major blocs, there is definitely a concern. It’s still looking positive, but it’s a declining rate of growth,” says Morris, explaining that the 2017 increase is not something he expects to continue looking forward.
“If you look at the last two decades or so, you’ve seen air freight growth of 5, 6 percent … but it’s obviously impacted by the trade cycle and GDP growth … Air freight is a particular kind of freight … it tends to be used for more immediate restocking, and when people want something they want it now, so you see a bit of a surge.”
He adds that “unlike passengers, freight doesn’t mind going the wrong way around the world, so Middle East carriers have been able to develop a very significant market between Asia and Europe for example. It doesn’t fly direct but provides the right service at the right price. So freight is slightly different to the trends that you see on the passenger side.”
Also on this episode of Counting the Cost:
Google anti-trust case: The European Union slapped Google with a record $5bn fine for using its Android smartphone system to illegally boost its search engine – the biggest anti-trust penalty in EU history. Sonja Gallego reports from Paris.
Qatar World Cup: We take a look at the world’s largest air-conditioned open-air arena and Qatar’s Winter World Cup preparations – now in full swing. Joanna Gasiorowska reports.
Ethiopia-Eritrea ‘bird of peace’: Ethiopian Airlines conducted the first direct passenger flights between Addis Ababa and Asmara, reconnecting Eritrea and Ethiopia after a 20-year military standoff. Mohammed Adow reports from Addis Ababa.