African Development Bank Group President Akinwumi Adesina has said that the tariffs announced by the US government on African countries will weaken local currencies and also increase the inflation rate.
He also projected that the cost of servicing debt as a share of government revenue will rise, as expected revenues decline.
Speaking in Abuja at the 14th Convocation Ceremony of the National Open University of Nigeria (NOUN), on Friday, April 11, he said, “47 out of 54 African countries have been placed under higher US tariffs. The immediate direct effects of the tariffs on African countries will be a significant reduction in exports and foreign exchange availability. This will send other shock waves through African economies.”
He continued: “Local currencies will weaken on the back of reduced foreign exchange earnings. Inflation will increase as costs of imported goods rise and currencies devalue against the US dollar. The cost of servicing debt as a share of government revenue will rise, as expected revenues decline.”
To build resilient economies, Adesina said that “Africa must chart its future, relying not on the benevolence of others but on its own determination for self-reliance, building reliable alliances, leveraging opportunities in the global dynamics, while putting Africa first. Only then will Africa be great again!”
Meanwhile, Ghana has been given a 90-day pause on the recent 10 per cent tariff imposition by the US government following a retaliatory tariff imposed on some of its trading partners worldwide.
Speaking on the new development, the Minister of Trade, Agribusiness and Industry (MoTAI), Elizabeth Ofosu-Adjare, said the 90-day period given Ghana last Wednesday would provide the country an opportunity to assess the full impact of the tariff and adopt various strategies to mitigate the immediate impact on the country’s trade and economy.
“All trading partners with the US have been placed in the 10 per cent tariff ban, with a 90-day pause for those within the reciprocal tariff to renegotiate a possible reduction, with the exception of China, which has been hit with 125 per cent tariff imposition”.
The minister was speaking at a stakeholder engagement on the recent imposition of a 10 per cent tariff on Ghanaian exports at the National AfCFTA Coordination Office in Accra on Friday April 11.
