The International Monetary Fund (IMF) expressed concerns on Friday about the potential impact of China’s economic slowdown on sub-Saharan Africa, particularly among oil-exporting nations. The IMF attributes this deceleration to a downturn in China’s property market and the lingering effects of the coronavirus pandemic.
The fund has urged the region to respond to declining import demand and diminishing Chinese economic engagement. A report by IMF economists, including Hany Abdel-Latif, suggested that a one percentage point drop in China’s real GDP growth rate could result in approximately a 0.25 percentage point decrease in sub-Saharan Africa’s GDP growth within a year.
The impact on non-oil-exporting countries is expected to be slightly less severe, with an estimated growth loss of 0.2 percentage points due to China’s economic slowdown. Despite the slowdown, these countries are still predicted to maintain an annual growth rate of about 4% this decade, a decrease from the previous 7%.
The IMF also emphasized that Chinese lending and direct investment to sub-Saharan Africa have been dwindling since 2017. To counteract these effects, the fund recommended that countries in the region focus on enhancing inter-African trade and increasing investments in infrastructure and human capital.
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