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10 African Countries That Need A Break From Falling Chinese Imports In 2016

10 African Countries That Need A Break From Falling Chinese Imports In 2016

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China imported nearly 40 percent less from Africa in 2015 than the previous year, but Chinese exports to Africa rose by about 4 percent in the same period, Chinese officials said Wednesday, according to a report in Mail&GuardianAfrica.

To withstand global volatility, Africa needs to develop its domestic capacity by increasing manufacturing and growing intra-African trade, U.S.-based World Bank said.

Natural resources from Africa such as oil and iron ore helped fuel China’s economic boom, and China became Africa’s No. 1 trade partner in 2009, giving it increasing political influence.

But growth has slowed in the world’s second-largest economy, and world prices for commodities have taken a beating. African exports have relied on commodities to boost the Africa-rising narrative.

China’s growth is becoming less dependent on heavy industry, further lowering demand for raw materials, economists say.

African oil exporters are expected to be especially hard hit. China said its imports from Nigeria slumped more than 50 percent by value last year. China’s President Xi Jinping announced In December $60 billion in loans for Africa, a sign of its continued commitment to the continent despite less investment.

China’s slowdown likely contributed to the economic slowdown in sub-Saharan Africa, where growth fell from 4.6 percent in 2014  to 3.4 percent in 2015, according to a new World Bank report.

Analysts are increasingly urging stronger trade with India.

China’s slowdown—China calls it a rebalancing— has helped depress global demand. It could be a bumpy ride in 2016 with the worst effects still ahead for Africa.

These are 10 African countries expected to be hit hard by falling Chinese imports in 2016.

Sources: Mail&GuardianAfrica, WorldBank

Oil, Algeria. Photo: Emily Boulter/globalriskinsights.com
Oil, Algeria. Photo: Emily Boulter/ globalriskinsights.com

10. Algeria

About $2.17 billion of Algeria’s petroleum product sales in 2013 were to China. Lowered oil prices are bringing about political changes in this highly controlled country.

Nevsun Resources' Bisha gold and copper mine in Eritrea. Photo: Nevsun/mining.com
Nevsun Resources’ Bisha gold and copper mine in Eritrea. Photo: Nevsun/mining.com

9. Eritrea

In 2013, Eritrea sold $50 million worth of copper to China. Losing that could fuel unemployment in this country with a GDP of $3 billion according to World Bank. Eritrea has few international partners and financing is at a premium, Mail&Guardian reported.

Photo: awoko.org
Photo: awoko.org

8. Sierra Leone

Before Ebola, Sierra Leone’s real GDP grew 7 percent, but if you exclude iron ore it was only 1 percent, according to the World Bank. Since 2010, the country saw iron ore exports grow 27,000 percent in value—the fastest in the world. In 2013 it sold $1.2 billion worth of iron ore to China, accounting for 95 percent of its exports to the country. The country is just beginning to recover from Ebola.

Doctor examines resident in DRC, 2007. Photo: Xinhua
Doctor examines resident in DRC, 2007. Photo: Xinhua

7. The 2 Congos

The Republic of Congo sold nearly $5 billion worth of oil — 95 percent of its exports — to China in 2013. “China is an active participant in the resource sectors of the Democratic Republic of Congo, which has the world’s largest trove of minerals,” Mail&Guardian reports.

Sudan oil pipeline Photo: therichest.com/openecosource.org
Sudan oil pipeline
Photo: therichest.com/openecosource.org

6. South Sudan

A fifth of South Sudan’s GDP in 2012 came from oil exports to China worth $2.25 billion. Since then, civil war has hurt production. New data this week showed inflation in South Sudan climbed nearly 40 percentage points in December alone as conflict takes its toll on the economy.

Photo: c6angola.wordpress.com
Photo: c6angola.wordpress.com

5. Angola

China imported 14 percent of its oil from Angola in 2012, according to the Observatory of Economic Complexity. Oil was the main source of Angolan government revenue and export earnings. Angola spent 2015 trying to borrow money, and this month the kwanza currency fell the most since September 2001 after the central bank allowed it to devalue.

New 172-km road built by China in the Brakna Region, southern Mauritania, connects regions of Aleg, Kiffa, Assaba and Brakna in Western Sahara, Aug. 4, 2014. Photo: Xinhua
New 172-km road built by China in the Brakna Region, southern Mauritania, connects regions of Aleg, Kiffa, Assaba and Brakna in Western Sahara, Aug. 4, 2014. Photo: Xinhua

4. Mauritania

In 2013 Mauritania sold $2 billion worth of iron ore — nearly half its GDP — to China along with significant amounts of copper ore. Few people are keeping track of this country, Mail&Guardian reports, but it may be one of the most exposed to the Chinese slowdown. China done oil exploration in Mauritania and is building ports, airports, hydropower and fisheries. China is this West African country’s biggest export market.

Zambia copper mine. Photo: abb.com
Zambia copper mine. Photo: abb.com

3. Zambia

Foreign direct investment is crucial for Zambia, which sold $4.5 billion worth of copper to China in 2013 — the bulk of its export revenue. Decreased Chinese demand hit Zambia hard, and in 2015 its currency was the worst performing in Africa and the second worst worldwide. The outcome of  the August presidential election could hinge on this.

Gold Fields miner, South Africa. Photo: BusinessDay
Gold Fields miner, South Africa. Photo: BusinessDay

2. South Africa

Mines have closed and thousands of workers were laid off in South Africa, which is dependent on commodity exports. China’s slowing demand hit South Africa hard. On Monday, the rand fell to record low of 17.9169 against the dollar before recovering, partly due to market problems in China, its largest trading partner. The country is expected to go into recession and get junk status by ratings agencies.

Falling Chinese Imports In 2016
A woman walks along an oil pipeline in Warri, Nigeria. Photo: George Osodi/AP

1. Nigeria

China became one of the top oil buyers in Africa’s top oil-producing country, then reduced oil imports by more than 50 percent in 2015. Oil contributes up to 90 percent of Nigeria’s export revenue and most of Nigerian government revenue. Add that to record-low oil prices, and it could get very uncomfortable for Africa’s largest economy in 2016.