Standard Chartered Bank on global economic outlook

The recent announcement of sweeping tariffs by U.S. President Donald Trump targeting almost every country in the world has ignited fears of a global trade war. In a recent interview with CNBC Africa, Razia Khan, Chief Economist at Standard Chartered Bank, discussed the potential impact of these tariffs on sub-Saharan Africa's economic growth. Khan highlighted the historical significance of global growth outlook on the region, especially due to its commodity dependence. She expressed concerns about the escalating trade tensions between the U.S., Europe, and China, emphasizing the negative impact on commodity prices and the overall global economy. With the uncertainty surrounding the trade war, sub-Saharan Africa's commodity-dependent economies are facing significant challenges. Despite some optimism around domestic reforms in larger African economies, the vulnerability to external factors like trade policy uncertainty remains a key concern. Khan also discussed the potential implications of the tariffs on sub-Saharan Africa's growth forecast, mentioning that it is too early to predict the full extent of the shock on the region's economies. While the U.S. accounts for 16% of global goods trade, the reactions of other trading partners like China and Europe will play a crucial role in determining the overall impact on sub-Saharan Africa. Khan underscored the importance of ongoing domestic economic reforms in providing some resilience to the region amidst the challenging global economic environment. She emphasized that the growth outlook for sub-Saharan Africa had shown some positive signs with reforms and changes in key economies, but the uncertain global demand and commodity prices pose significant risks. As discussions around a potential global recession emerge, Khan remained cautiously optimistic, citing the resilience and adaptability of economies like the U.S. and China in mitigating the risks. The interview also delved into the political landscape in South Africa and Nigeria, with a focus on the impact of governance structures on economic policies and growth forecasts. Khan highlighted the need for stable governance structures that facilitate the passage of essential economic legislation, irrespective of the specific configuration. She provided insights into growth forecasts for South Africa and Nigeria, pointing out the critical role of global headwinds in shaping economic outcomes. Khan praised Nigeria's reforms under President Tinubu but cautioned against the immediate challenges posed by softening global oil prices and trade uncertainties. The interview concluded with a discussion on East Africa's economic growth potential, with a nuanced view on the region's performance amidst ongoing fiscal reforms and political uncertainties in key economies like Kenya and Uganda. Khan emphasized the importance of sustained reform efforts in driving long-term growth and resilience to global economic headwinds.