KIGALI (Reuters) - African countries need to diversify export markets and add value to raw materials as a trade war between the United States and China threatens to hit growth, the African Development Bank (AfDB) president said on Monday.
The continent’s economy is expected to expand by 3.4% this year and 3.9% in 2020, Akinwumi Adesina told Reuters, but there are risks from a slowing global economy.
“Tensions between United States and China in terms of trade is a problem,” he said. “Many African countries export ... raw materials to China. And so, if China’s economy weakens (then) demand for raw materials from Africa weakens.”
The United States and China, the two top economies in the world, have been embroiled in a 16-month trade war that has disrupted supply chains and been a drag for economies worldwide.
In addition to the U.S.-China battle, Britain’s potential exit from the European Union is another risk for Africa, Adesina said. “Africa trades quite a lot with Europe but also with the UK,” he said.
African governments should build regional chains to add value to products, so as to reduce dependency on primary commodity exports, he added.
“The most important thing for Africa though is for Africa to focus on what works for itself and that’s the free continental free trade area for Africa,” he said.
Reporting by Clement Uwiringiyimana; Editing by Omar Mohammed and Andrew Cawthorne