Africa’s growing prominence in world trade
International Business News – Reference News Network reported on July 6. According to the website of the Royal Elkano Institute of Spain on July 1, Africa’s important position in world trade has become increasingly prominent.
As we all know, Africa is a mainland that is not important in international trade. According to official statistics, it only accounts for 3%of global commodity and service trade. However, the current trade situation is bringing more attention to the continent. Although the Ukrainian war has a significant adverse effect on Africa (especially in terms of price rise and economic slowdown), this conflict also helps other trade more active. For example, the question of what role can some African countries play in reducing European energy dependence is raised. At the same time, as a strategic mineral supplier, Africa’s importance of reducing the dependence of world (especially Europe) to China has been highlighted again. The two African countries, South Africa and Senegal, were invited to participate in the Seventh -way Group (G7) summit held in Germany, which confirmed that the importance of Africa is rising.
The Ukrainian war caused confusion to the world trade at least in two aspects: rising food prices and soaring energy prices. These two trends have begun before the war, and the impact on Africa is uneven.
On the first front, the price of some foods – such as wheat – has skyrocketed. This is not only due to the decrease in exports from Ukraine, but also because the Indian government announced a ban on wheat exports to ensure domestic price stability. According to the International Monetary Fund, 85% of the total wheat consumed in Africa is imported from abroad, and for many countries, Russia and Ukraine are the main suppliers.The charts of the United Nations Conference showed that Somalia and Benin 100%relied on purchasing wheat from Russia and Ukraine, and about 15 African countries rely on Russia and Ukraine to depend on Russia and Ukraine more than 50%.
In the second aspect, that is, in terms of fuel prices, the most affected is naturally as African countries with oil importing countries. It is also determined that it is undoubted that, as often in the context of high oil prices, while some countries are impacted, other African countries -exporters -but benefit from the expansion cycle of price.
The current plan of the European Commission is to eliminate energy dependence on Russia by 2030, which has opened a window for African oil and natural gas exporters.
German Chancellor Olav Tonzes visited Africa in May is a strong signal, indicating that interest in the African continental energy may be re -ignited.
With the transformation of renewable energy and low -carbon energy, the world’s demand for solar panels, batteries, and wind turbines has grown in index level. Lithium, graphite, cobalt, nickel and rare earth and other minerals are essential for green technology manufacturing.
The supply of these materials is highly concentrated in China and a few countries, and some of them are African countries. For African countries, the increase in demand for these minerals is an opportunity to invest and create employment.