Cape Town — The International Monetary Fund (IMF) has urged sub-Saharan African nations to take steps to offset the recent slowdown of growth in China.
In a briefing published during the IMF’s October meetings in Marrakech, the fund urged countries to “strengthen their resilience and implement structural reforms to foster economic diversification, deepen intra-regional trade, enhance competitiveness, and catalyze domestic growth.”
Noting that China is now sub-Saharan Africa’s region’s largest trading partner, the briefing said exports have more than quadrupled in nominal U.S. dollar terms since 2000, with a fifth of the region’s total exports of goods now going to China, with three-fifths of those comprising metals, mineral products and fuel.
As a consequence, the IMF said, the slowing of China’s economic growth “is likely to affect African trading partners negatively over the medium term, mainly through reduced trade…”
The briefing also noted that China is the single largest source of imports for African countries, mainly comprising manufactured goods and machinery, and that it has become a major funding source for African governments, especially for public infrastructure projects.
China increased its share of external public African debt from less than two percent before 2005 to about 17 percent in 2021, thus becoming the largest bilateral official lender to the region. But since 2017, “sub-Saharan Africa has seen a retrenchment of Chinese investment and lending…” the fund said.
“Although China’s annual growth rate averaged about 10 percent in the 2000s, it grew by less than 8 percent per year on average in the 2010s. China’s growth has declined even further since the pandemic, and the latest IMF projections show average annual growth of only about 4 percent in the next five years, with notable trends toward reduced investment and greener technologies…
“Given the deep economic ties, a further slowdown in China’s growth in the medium to long term is likely to affect economic activity negatively in sub-Saharan Africa.”
Read the full briefing >>
