Market News

BY Success Umenze 

…says it’s time to strengthen AfCFTA

Ken Ife, professor and lead consultant to ECOWAS Commission, has said that Africa will be affected by the global ‘tariff war’ triggered by President Donald Trump of the United States.

Ife, a global trade analyst, said Africa must look inwardly and strengthen the African Continental Free Trade Agreement (AfCFTA) to hedge against the fallout of the tariff war.

The renowned economist was a guest on BusinessDay Television (BDTV)’s ‘Big Story’ segment on Thursday, where he spoke on the topic ‘Global trade, tariffs: What’s in for Africa.’

He said though China remains the target of Trump’s tariffs war, the rest of the world would ultimately feel the impact, Africa inclusive.

“China has been the producer of most products and goods used by people around the world and it is targeted by the tariff imposition by President Trump”, he noted.

The Trump’s administration has imposed tariffs of different percentages on exports to the US by various countries, with China and other advanced economies retaliating.

“For Africa, this policy is going to affect their whole macro economy due to their high dependency on importation,” he said.

He noted that Ronald Regan in April 1987 warned the Americans not to forget the lessons of the past, the depression, noting that the tariff war would make citizens and the country lose jobs that are export- and import-related.

He referred to a warning by the World Trade Organisation (WTO) that the trade war between America and China would cause 90% reduction in the trade between the both countries and negatively affect global trade.

Ife added, “China would have to look for another market for over $500 billion worth of goods already paid for, which are already in the production line, due to the tariff war.

“And this would cause a devaluation of China currency because they have to sell their goods at cheaper rates of 10% to 20% and also countries like Nigeria would seize the opportunity to get dollars by any means just to buy this goods at the cheapest rates.

“African countries should lie low and trade with each other. Also Nigeria should also create trade policies to trade with other African countries and ECOWAS countries ,” he said.

Ife also mentioned that Nigeria should stay away from the tariff war and watch while trying to face domestic challenges and add value to its area of comparative and competitive advantage and reduce exposure to the dollar.

On how to tackle and regulate the problems of Ponzi schemes, Professor Ken said, “A Ponzi scheme is like Insecurity in Nigeria.”.

He concluded by saying that the government and regulatory bodies like the Securities and Exchange Commission (SEC) should regulate the system.