The economic fortune of Nigeria is likely to get affected by the declining growth of China, according to the International Monetary Fund (IMF). It was highlighted by the Fund that owing to the fact that China has built strong economic ties with countries that are located in sub-Saharan Africa over the past two decades, the recent decline in growth which it is currently facing could affect, on an average of 0.5 percentage points, growth in Nigeria.
However, China is regarded at the largest single country trading partner of the sub-Saharan African region. This is because it purchases one-fifth of the exports of the region, which includes metals, fuel and minerals. The IMF noted that the country also makes available the majority of the machinery and manufactured goods imported in the region. It was further said that China’s recovery from the COVID pandemic might affect the whole of Africa. IMF disclosed this under the title: “China’s Slowing Economy Will Hit Sub-Saharan Africa’s Growth.”
Africa should be concerned about this matter.
According to the post, the recovery of the Asian country from the pandemic has recently slowed down due to a property downturn and dwindling demand for its produced goods, just as global growth has also experience a slow pace. Africa is concerned with this matter because a one percentage point decline in the growth rate could lead to a reduction of 0.25 percentage points average growth in a year, as projected by the most recent Regional Economic Outlook.
Furthermore, the Outlook revealed that the adverse effect of the slowing economy of China is beyond sovereign lending to sub-Saharan Africa, which decreased below $1 billion in 2022, indicating the lowest level in almost 20 years. It noted that the cutback indicates a progression from massive ticket infrastructure financing. With China being a major lender to sub-Saharan Africa, loan cutbacks will be felt in Cameroon, Nigeria, Angola, Kenya, and Zambia, where it is considered the largest bilateral lender.
Efforts towards the diversification of African economies are essential.
Also, the IMF stated that countries in the sub-Saharan African region will require adaptability to the growth slowdown and declining economic engagements by developing resilience through heightened inter-African trade, and by redeveloping buffers, as well as tax policy reforms and revenue administration improvements. It was also noted that efforts towards the diversification of African economies are essential for the sustenance of future growth. There is a high demand for minerals that contribute to the development of renewable energy.
This high demand could ensure the provision of an opportunity for countries to build new trade relationships, while developing more capabilities for local processing. Countries can aid improvement of their competitiveness through creation of a favourable business environment, investment in infrastructure, and enlarging local financial markets. It was recently revealed by the Consulate General of China in Lagos, Yan Yuging, that the bilateral trade volume between Nigeria and China, in the first three quarters of this year, 2023, was at $17.25 billion.
Bilateral trade volume between Nig. & China attained $23.9bn in 2022.
Yan Yuging stated that China is an essential trade partner for Africa’s most populous country, Nigeria. The customs data revealed that the bilateral trade volume between Nigeria and China attained $23.9 billion in 2022. It also showed that the exports to Nigeria stood at $22.3 billion. Also, imports from Nigeria had an estimate of $1.6 billion. At the end of December 2022, the aggregate borrowing increased to $4.29 billion, as shown by the Debt Management Office’s data.
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China’s slow pandemic recovery to affect Nig. – IMF disclosed — “China’s Slowing Economy Will Hit Sub-Saharan Africa’s Growth.” – Express your point of view.
The IMF’s concern about China’s slowing economy affecting Nigeria underscores the interconnectedness of global economic dynamics. Nigeria should focus on economic diversification and resilience to navigate potential impacts, emphasizing inter-African trade and reforms for sustained growth.
Nigeria is concerned about the possible effects of China’s economic downturn, particularly in light of the two nations’ close economic links. Maintaining growth in the face of shifting economic factors may need initiatives to improve efficiency and evaluate options in resources concerning renewable energy.
I totally get your concern about China’s slow pandemic recovery and its potential impact on Nigeria. It’s true that China plays a significant role in the global economy, and any slowdown there can have ripple effects on other countries, including those in Sub-Saharan Africa.
However, it’s important to note that the IMF’s statement about China’s slowing economy affecting Sub-Saharan Africa’s growth is a general observation based on economic interdependencies. The extent of the impact can vary depending on several factors, such as the level of trade and investment between China and Nigeria.
Nigeria has a diverse economy and is not solely reliant on China for its growth. While there may be some indirect effects, Nigeria’s economic prospects are influenced by multiple factors, including domestic policies, global commodity prices, and regional dynamics.
It’s always good to stay informed about global economic trends, but it’s also important to consider the specific context of each country’s economy. Nigeria has its own unique strengths and challenges, and its recovery from the pandemic will depend on a combination of domestic and international factors.
China’s slow pandemic recovery to affect Nig. – IMF disclosed — “China’s Slowing Economy Will Hit Sub-Saharan Africa’s Growth .Nigeria is concerned about the possible effects of China’s economic downturn, particularly in light of the two nations’ close economic links. increasing intra-African commerce, changing policy, and other means of enhancing durability and broadening the economy