At the just ended World Bank/IMF Annual meetings in Bali, Indonesia, we almost had the opportunity to talk about issues relating to global power disequilibrium and trade wars. I deliberately say ‘almost’ because though the Africa Export-Import Bank (AfriExim) organized an evening on this matter, the panelists and the audience missed the opportunity to talk about the economics of the subject matter. I can understand this because usually people are more interested in the politics of these matters than the economics, but I thought that as Africans, we would have used the opportunity to discuss how Africa can benefit from this global power disruption and its attending trade war.
While the truth is that most global actors don’t like what President Trump is doing especially with the escalation of trade wars, I think Africa should look deeper and think how it can strategically position itself to benefit from this economic disruption. It appears to me that the American people will, more than likely, re-elect Trump in 2020 for a second term and so the world will continue to experience these “nationalistic” or “anti-globalist” move and its impact for the next decade or so.
But here is what I see, and I think many African countries including Liberia do have an excellent opportunity to benefit from the current trade war that is taking place between the United States and the People’s Republic of China and even the European Union. For example, in 2017, China imported US$12.3 billion worth of soybeans from the US. With a trade war going on and China having to look for a place where it can buy cheaper and better soybeans, why doesn’t African countries think about filling in that gap? That’s a US$12.3 billion market. This amount nearly sufficient to wipe out the 2017 trade deficit between China and Africa which was about US$20 billion. Or maybe we will spend our valuable time and energy discussing aids which is less than US$80 billion annually. We spend about 80% of our time discussing aids while important market opportunities such as these stare us in the eyes and pass.
Today, China imports US$75 billion worth of goods and services from Africa and exports US$95 billion. So just imagine if Africa could use this as an opportunity to close this trade deficit and create more jobs on the continents. I am using soybeans just as an example but there are several other goods affected by this trade war that countries like Liberia could easily benefit from. What is more interesting is that soybean takes less than 90 days to be ready for harvest. Most African countries have the climate and soil to grow better soybeans but why we are not taking advantage of this is still a puzzle to me.
This is where the AfriExim Bank and the African Development Bank (AfDB) should be rushing to put money so that Africa’s competitiveness can increase rapidly but I guess they are also interested in the political condemnation than the economic exploitation of this global disruption that can clearly benefit the Continent.
I truly wish that Liberia and other poor African countries could take advantage of this golden opportunity and transform their economies and improve the lives of their people.