Sino-US trade tensions will affect Africa’s growth

No country will come out unscathed by the ongoing trade tensions between the United States and China, said Raphael Tuju, secretary-general of Kenya’s ruling Jubilee party.

He called for the world’s two largest economies to return to the negotiating table to salvage the situation that is quickly reverberating negatively across the globe.

Early this year, the African Development Bank said trade tensions between the two economic giants could shave 0.7 percent from Africa’s GDP in 2019.

Furthermore, with Africa still a primary exporter of its resources, global economic recession would have a significant impact on its economies. Recession would also lower growth in the tourism sector, a major foreign earner in many countries, said Tuju.

Slow growth in China and the US would also roll back progress made in regional and global anti-terrorism, peace and security programs spearheaded by the two countries. World stability is also on the line, he said.

Notably, with a large diaspora in the US, Kenya may face declining remittances if the tension negatively affects the economy.

Government data show that Kenyans in the US sent back $671.6 million in the first three months of 2019. The data further indicated that North America remained the main source for the remittances, accounting for 53 percent of the total in March.

Tuju said the “America First” rhetoric, advocated by the Trump administration, is a political move appealing to his domestic base. China, Mexico and other countries have been caught in the middle.

The World Trade Organization recently announced that global trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty.

Tuju said China’s stance toward multilateralism is in the best interest of the world and Africa’s ambitions to fight poverty. He added that the recent release of China’s White Paper on China-US trade talks, is commendable.

China’s commitment can be seen in its push to implement the Belt and Road Initiative, he said. However, China’s increased presence in Africa will be met by resistance from traditional partners. “China has to learn to navigate logically without being too sensitive,” said Tuju, who is also a cabinet secretary without portfolio.

He also called it “utter nonsense” assertions that China is pushing Africa into a debt traps. Tuju said the loans go largely into fund infrastructure projects, which are instrumental in giving the necessary impetus to Africa’s economic transformation.

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