Modest Increase in China-Africa Trade but African Deficit Remains a Problem

 The Guardian published on 22 January 2025 an article titled "China-Africa Trade Up 4.8pc to $295bn in 2024."

Total trade between China and Africa in 2024 grew by 4.8 percent over 2023 to $296 billion.  Chinese exports to Africa rose 3.5 percent to $179 billion while African exports to China increased 6.9 percent to $117 billion.  

This left the 54 African countries with a trade deficit of $62 billion in 2024, down from $64 billion in 2023.  China exported finished goods to Africa while Africa exported raw materials and agricultural products to China.  

China's elimination of tariffs on 98 percent of products imported from 21 African countries and zero tariffs on products from the 33 least developed Arican countries has done little to redress a persistent African trade deficit with China.  

Do African Countries Need a New Economic Model?

 World Political Review published on 16 January 2024 an analysis titled "African Countries Need a New Economic Model" by Liam Taylor, freelance journalist based in Addis Ababa.

The author argues the structural adjustment reforms that governments adopted in the 1980s, often under duress, have set the tone for economic policy ever since.  The lacunae in that model--in particular, its neglect of the state and its dismissal of industrial policy--are part of the reason why Africa remains so vulnerable to external shocks.

The rise of China has given renewed luster to statist development models.  In the West, industrial policy is no longer a dirty word.  Could the current moment prove an inflection point?  The author concludes the old models of public finance, economic policy, and even the climate are all creaking.  So far policymakers have been hesitant to explore new ones.  Now is as good a time as any to start.  

Comment:  While it may be a good time to look at new economic models on a case-by-case basis, a new model for all of Africa makes little sense.  Some of the continent's 54 countries are doing just fine with their current model.  An end to corruption in a number of other countries is more important than implementing a new model that permits corruption to continue.  And for goodness' sake, don't return to the statism of the 1960s and 1970s with bloated manufacturing enterprises and inefficient service industries controlled by governments.  

Can China's Economy Stave Off Recession in Africa?

 The Institute for Security Studies in South Africa published on 17 January 2023 a commentary titled "Can China Breathe Fire into Africa's Economies?" by Ronak Gopaldas, director of  Signal Risk.

The author concludes that the jury is still out concerning the ability of China to prevent African countries from falling into recession.  Africa should benefit from increased Chinese natural resource purchases and outbound tourist business but there may be significant delays before these consumption patterns return to pre-pandemic levels.

Russia's Invasion of Ukraine Poses Challenges for Africa

 The Mail & Guardian published on 23 May 2022 an opinion piece titled "Russia-Ukraine War a Threat to Africa's Economy" by Mzukisi Qobo, head of the Wits School of Governance at the University of Witwatersrand.

The author, who is also critical of the US, argues that the Ukraine war is disrupting the financial markets, fragmenting supply-chains and increasing the price of food and commodities.  Africa will be a casualty.  The war is generating new economic shocks and risks.  Increases in the price of energy, metals, and food on the back of the Russia-Ukraine war are raising inflation concerns around the world and with food security implications for many African countries.

President of African Union to Visit Moscow and Kyiv

 Agence France Presse published on 23 May 2022 an article titled "African Union Chief Announces Visits to Moscow, Kyiv."

Senegalese president and current president of the African Union, Macky Sall, will soon visit Russia and Ukraine on behalf of the African Union.  He added the African Union will arrange for President Zelensky to address the AU heads of state.  

Putin's War: US Needs a Clearer Message in Africa

 The US Institute of Peace published on 17 May 2022 a commentary titled "On Ukraine, Africa Needs a Clearer U.S. Message" by Heather Ashby and Joseph Sany.  

The United States must focus its message on Ukrainian self-determination and on building the fairer international system that is sought by the Global South.  This means involving these countries more in the decision-making apparatus of multilateral institutions.  U.S. messaging that calls for the weakening of Russia does not resonate in the Global South and plays into the hands of Putin.

Impact of Putin's War on Africa

 Nigeria's The Guardian published on 17 May 2022 a press release titled "The Russia-Ukraine Conflict and Its Impact on the Infrastructure and Built Environment Industry in Africa" by the African Media Agency.

Russia's invasion of Ukraine has had significant negative impacts on the price and availability of key commodities in Africa.  The war has also opened some opportunities for African countries that can export gas to Europe such as Algeria, Nigeria, and Egypt.  

Impact of Putin's War on Africa

 The Hill published on 11 May 2022 a commentary titled "The Costs of Russia's War in Ukraine -- from Kharkiv to Khartoum" by K. Riva Levinson, head of a Washington-based consultancy that works on global emerging markets.

The author argues that Russia's invasion of Ukraine will likely worsen GDPs, increase inflation, and cause shortages of basic food stocks and commodities that spike the cost of living for Africa's poor.

Putin's War May Contribute to Destabilizing Africa

 The Voice of America published on 6 May 2022 an article titled "UN - Destabilizing Impact of Russia-Ukraine War Feared in Africa" by Lisa Schlein.

UN officials warn that soaring prices of food, fuel, fertilizers, and other commodities due to the Russia-Ukraine war could have a profound destabilizing impact on Africa.

Africa Becomes Collateral Damage of Ukraine War

 Bloomberg published on 30 April 2022 an article titled "Africa Becomes Collateral Damage of Ukraine War" by Bobby Ghosh.

Russia's invasion of Ukraine has cut Africa off from two major sources of grain and a price surge in basic commodities.  African countries may sit on the fence over the war in Ukraine, but they will be victims for years to come.

Some African Countries May Follow China's Lead on Russia's Invasion of Ukraine

 Premium Times published on 20 April 2022 a commentary titled "Zelensky and Africa's Disunity on the Russia-Ukraine Crisis" by Oluwaseun Tella.

Some African countries may be following the lead of China, not Russia, in refusing to condemn Putin's invasion of Ukraine.  

Putin's War Threatens African Economies

 The Carnegie Endowment for International Peace published on 19 April 2022 an analysis titled "How the IMF and World Bank Can Support African Economies Hit Hard by Russia's Invasion of Ukraine" by David McNair.

In the wake of Russia's invasion of Ukraine, the prices of staple commodities such as wheat, barley, and vegetable oils have skyrocketed due in part because Russia and Ukraine are the breadbasket of the world.  They export a third of the world's wheat, a quarter of the world's barley, and 69 percent of the world's sunflower oil.  Ukraine's Black Sea ports are blocked and Russia has apparently shelled its granaries and mined farmland.  An acute food crisis is developing in west and central Africa.  Higher food prices are also adding to Africa's high debt service challenges.

US Urges Africans to Take Strong Stand on Russia's Invasion of Ukraine

 Aljazeera published on 31 March 2022 an article titled "US Calls for 'Strong African Response' to Russian Aggression."

The US is looking for a strong African response to Russia's aggression in Ukraine and is  prepared to help mitigate the negative economic effects of the war on Africa.

Putin's War Is Damaging the Developing World

 Project Syndicate published on 11 March 2022 a commentary titled "Putin's War Is Damaging the Developing World" by Jayati Ghosh, University of Massachusetts.

The economic impact of Russia's invasion of Ukraine will be felt around the world, including in many developing countries.  Immediate effects include rising oil and energy prices, increasing global food prices, additional inflationary pressures, and real reductions in global food supply.  

Putin's War in Ukraine Alters Russian Interests in Africa

 The European Council on Foreign Relations published on 10 March 2022 an analysis titled "Competitive Values: Russia's Conflict with Europe in Africa" by Theodore Murphy.

Russia's role in Africa takes on new meaning in view of its invasion of Ukraine.  Increasingly, Russia sees Africa as a source of commodities and a battlefield to weaken Europe.  Europe is no longer Africa's pre-eminent international partner.  It is one of several major partners that now includes Russia.  

The Impact of Putin's War on Africa

 African Business published on 3 March 2022 an article titled "How Will the Russia-Ukraine War Affect Africa?" by Shoshana Kedem.

Surging commodity prices will create winners and losers in Africa.  Large importers of wheat like Egypt, Kenya, Nigeria, and Ghana and of oil like Kenya will experience negative impacts.  Exporters of oil like Nigeria and Angola will benefit.  But Russia accounts for only 2-3 percent of Africa's trade, although it is 8 percent for Malawi and 7 percent for Uganda.  Nor is Russian FDI in Africa significant, less than 1 percent of total FDI in Africa.  Sanctions on Russia will decrease FDI even more.

Coronavirus Expected to Disrupt African Economies

The ChinaAfrica Project published on 26 February 2020 an analysis titled "COVID-19 Expected to Cause Widespread Economic Disruption in Africa" by Jeremy Stevens, chief China economist at Standard Bank in Beijing.

The author lays out the negative, short-term consequences for Africa of China's coronavirus, but concludes that it is unlikely to alter the long-term, structural China-Africa commercial ties.

Coronavirus Hitting African Economies

CNBC published a story on 10 February 2020 titled "The Coronavirus Fallout is 'Battering' African Economies, Capital Economics Says" by Elliot Smith.

Port closures in China are causing oil importers to cancel purchases and forcing sellers to look elsewhere. African oil exporters such as Angola have been forced to re-sell oil at a discount. African commodity prices have also been affected.

China's Commercial Footprint in Africa

Standard Bank of South Africa published on 23 August 2018 an overview titled "Forum for China-Africa Cooperation: Africa Still Solidly in the Crosshairs of China Growth" by Jeremy Stevens.

The paper looks at China's economic engagement with Africa, especially investment and trade. It suggests that China's foreign direct investment in Africa remains small, averaging just over $2 billion annually during the last 15 years. It puts China's total investment stock in Africa at between $50 billion and $60 billion. The study says there may be significantly more--upwards of 30,000--Chinese companies, most of them small and private, in Africa than has been previously reported. It comments on Africa's growing trade deficit with China and predicts that about 30 percent of China's trade with Africa will be settled in renminbi by 2025.

Africa and China: Industrialization, Agricultural Reform or Export of Natural Resources?

The Washington Post Monkey Cage published on 24 July 2018 an article titled "Xi Jinping Is Visiting Africa This Week. Here's Why China Is Such a Popular Development Partner" by Deborah Brautigam, Johns Hopkins University School of Advanced International Studies.

Commenting on Xi Jinping's recent visit to Rwanda, Senegal, and Mauritius, the author explains that China is gaining popularity in Africa by supporting industrialization, which is the top priority of many African leaders.

The East African published on 1 August 2018 an interview with Holger A. Kray, agricultural economist at the World Bank, titled "Is East African Agriculture at Risk of Playing Second Fiddle to Oil Wealth?"

While the interview does not deal with China or industrialization, it makes the point that in several East African countries the economic policy focus should be on commercialization of agriculture rather than a reliance on the export of oil. The key challenge for Kenya, Uganda and South Sudan, says Kray, is how to support the agricultural sector to take advantage of the shift in consumer behavior and consumer demand globally towards higher quality agricultural products.

My point is that there is no single prescription for economic success in Africa's 54 countries. Some combination of industrialization, agricultural reform, resource extraction, and enhancement of the service sector is required. My concern is that the current emphasis by many African leaders, supported by China, to focus on industrialization will have disappointing results. A small number of African countries may be ready to shift significantly into industrialization; most are not. Most would be well advised at this stage of development to focus their energy on the improvement of agriculture, including policy reform.