China’s economic hard landing impact on Africa: A scenario analysis

Abstract

Shocks to aggregate commodity demand from China are having significant impact on global commodities and commodity prices. Fears persist that the economic slow-down in China might be steeper and more chaotic than anticipated and reported, as China rebalances its economy thus impacting on growth prospects across world economies. Using a scenario analysis technique, this study evaluates a risk scenario if economic growth in China falls to 4 per cent rather than the projected 6.5 per cent and its associated impact on African economies. The impact of China’s economic slowdown on African economies from an export perspective shows that there is an urgent need for African countries to undertake structural upgrading and diversifica-tion of different sectors of the economy with particular emphasis on agriculture in order to mitigate reduced demand from China.