Chinese slowdown a risk for Africa

Sub-Saharan Africa’s supply chain risk score fell slightly in the fourth quarter (Q4) of 2015 from a record high in the third quarter, with macroeconomic improvements in Cote d’Ivoire, Namibia and Senegal the main contributory factors. Risk continues to increase as the slowdown in the Chinese economy weighed on the subcontinent’s growth in the fourth quarter of 2015. Many of the key economies in the region remain overdependent on commodity exports to China. At the same time, large external and fiscal deficits among key regional economies are other areas of concern. With a global commodities downturn, slowing growth in China and rising US interest rates, foreign investors have become more cautious about lending across the African continent. Faced with increasing interest payments, falling revenues and depreciating currencies, some countries are likely to struggle to service their debts. André Coetzee, managing director of the Chartered Institute of Procurement & Supply (CIPS) Africa, says the Chinese slowdown, further falls in global commodity prices, and the prospect of a rapid capital outflow as a result of the US interest rate increase are having an uneven impact on supply chain risks across sub-Saharan Africa’s key economies. – CIPS press release