African Economies Panic over China’s slowed Growth

African economies are now jittery over slowing growth in China.

The fear really spans from the fact that the region could lose huge aids and trading partnership (in terms of commodity export) from the second largest global economy.

China is currently the largest trading partner of Africa and also boasts of huge commitments in development assistance to the region.

China spent over half of its foreign aids in 51 African countries, and authorities there say they sent more than $80 billion in “pledged, initiated, and completed projects” between 2000 and 2012.

But figures last week revealed that growth has slowed sharply and deflation set in, as the economy is weighed down by a property slump and factory production at its weakest since the global financial crisis.

In the first three months of 2015, China’s GDP grew at “only” 7% year-on-year and is expected to stay at that level for the year from more than 14% growth it did in 2007, possibly the weakest seen in 25 years.

Abdalla Kadne Assane, minister of finance, Central African Republic, said in Washington at the weekend that China’s downward trend is not good for Africa because of the possibility of dovetailing into slowed assistance and trade relationship.

“The slowdown is a concern for us because we fear it may lead to their cutting down the assistance for us. The slowdown in China may also lead to slow commodity demand from Africa,” Assane told a press conference on Africa at the IMF/World Bank Spring Meetings.

Assane, who addressed the media alongside Amara Konneh, Liberian finance minister and Goodall Gondwe, finance minister, Madagascar, said African economies are now hoping and praying that China’s slowdown will not drag for too long.

“We are closely monitoring the indicators of this country that is quite important to us, and we pray that their recovery is fast,” he added.

Christine Lagarde, managing director, International Monetary Fund (IMF), said weekend in Washington that there is strong confidence in the growth of China but not as high as it used to be. “That level of growth is satisfactory given the level that China has reached,” she said.