Africa at critical juncture: as China slows, continent needs to diversify economic partners

With Chinese lending to Africa shrinking, the continent must focus on increasing its internal trade, diversifying trade-able goods away from commodities, and developing and solidifying its relationships with other global economic partners, according to a senior official at the Asia Business Council.
The continent has long had robust economic ties with China, but now faces a critical juncture as the latter’s economy softens, Sonja Cheung, editorial director at the Asia Business Council, writes in a recent opinion published in South China Morning Post. Therefore, she urges the continent to find ways to support its own development to buffer itself from China’s changing economic landscape and ensure its growth. While China had footed the bill for massive projects in Africa for the past decade, Beijing is now moving away from large spending sprees on the continent as China faces economic headwinds at home.
According to Cheung, a key approach for the African government would be to promote a broader range of trade-able goods outside natural resources to enhance commercial opportunities. Over-reliance on trading natural resources is not always beneficial, given price fluctuations, but also because resources can be a source of conflict, government corruption and poor governance. Moreover, boosting intra-African trade would reduce reliance on external global markets, and encourage diversification in agriculture, manufacturing and services — sectors that help create jobs. Diversifying trade partners, including with the United States, may also offer Africa a safety net amid China’s domestic issues. Overall, it’s time for Africa to shift towards diverse trade alliances, including within the AfCFTA, and new internal economic dynamics, Cheung concludes.