International Monetary Fund (IMF) urges African countries to prioritize growth over debt restructuring. The World Trade Organisation’s (WTO) Director General – Ngozi Okonjo Iweala addressed the opening plenary (OP) session at the 4th Finance for Development Conference in Seville. She insisted that the sustainable global development was still achievable even against a trade backdrop that was defined by the US President Donald Trump’s tariff war.
WTO Director General Ngozi’s message to the conference was hedged with uncertainty. He said that he doesn’t think that a conference has ever gathered in such difficult times. Difficult for the world, for the shared development aspirations, and for the means to finance the attainment of these aspirations.
Ngozi Okonjo-Iweala said that the developing countries are hoping to increase the export revenues to help prevent deterioration in their balance of payments that must now contend with disruption so considerable that it is feeding into financial instability.
According to WTO Director General, this was the reason that they have argued that least developed countries as a group, and Africa as a region, should be exempted from these reciprocal tariffs. It is better that they integrate them into the world trading system, so that they can stand a better chance to earn the resources with which to deliver on the Sustainable Development Goals.
Earlier this year, at the launch of the WTO’s 2025 World Trade Outlook, the WTO projected the global merchandise trade volumes that will decline by 0.2% in 2025. Nearly three percentage points below the level expected without recent trade policy shifts.
Reinstatement of ‘reciprocal’ tariffs would shave 0.6 percentage points off this forecast, which will lower the projected growth rate to -0.8%. A broader spread of policy uncertainty beyond US trading relationships would reduce growth by a further 0.7 percentage points.
Multiple African countries have been targeted by higher Trump tariffs which have been deferred pending a three-month consultation period. Among the African countries hardest hit by Trump’s drive to introduce what he says are ‘reciprocal’ tariffs are the Southern African states of Lesotho, whose goods will be hit with a tariff of 50%; Madagascar (47%); Mauritius (40%); Botswana (37%); Angola (32%) South Africa (30%); Namibia (21%); Zimbabwe (18%); Zambia (17%) and Malawi (17%).
Just days after the FfD4 conference in Sevilla came to an end, Washington announce the imposition of 30% tariffs on the European Union on July 09 and Mexico from the August 01. Donald Trump also announced last week that his administration will hit Brazil with a 50% tariff on products sent to the US.
The introduction or reintroduction of further tariff barriers that was announced less than a week after the FfD4 conference is expected to make the global trade slowdown even worse.