Brexit and protectionism could hurt Africa, Gigaba warns

kwame

May 4, 2017 4:48 PM

The Brexit vote was followed by a plummeting of the South African rand, the most internationally traded African currency.

Brexit and protectionism could hurt Africa, Gigaba warns

Africa’s economic growth could be hindered by rising protectionism and political strife in the West according to South Africa’s Finance Minister, Malusi Gigaba.

Speaking at the World Economic Forum on Africa in Durban, Mr.Gigaba, who was appointed recently to replace Pravin Gordhan as manager of the continent’s largest economy bemoaned falling commodity prices and an unwillingness by African economies to diversify.

“Brexit, uncertainties in various major economies including the United States and China - going hand in hand with that is the risk of many countries becoming protectionist and reducing international trade. That would have an enormous impact for us here in Africa,” he said.

“We need to diversify our economies, and we wouldn’t be doing that for any reason but for international trade.”

According to the Financial Times, China, for instance, knocked out 0.75 percentage points off the global growth rate when its growth rate fell from 10 percent to 6.3 percent in 2016.

Mr.Gigaba’s fears have also been shared at the forum by Benedict Oromah, President of the African Export-Import Bank. According to him, only 15% of the continent’s trade is intra-regional, a situation that had slowed down the growth in potential for the continent.

kwame