There seems to be a leadership vacuum in the world right now, as partly seen in the lack of a consensus in the protectionism versus globalisation policy dilemma. While prominent global leaders push the envelope with the trade wars, economists are predicting a potential financial crisis. Notably, global growth has decelerated gradually compared with its strong historical performance. Some of the reasons given for this slowdown include the recent rise in protectionism, dimming of economic activity, increase in trade wars and tighter credit marked by high interest rates. Protectionism In recent times, protectionism has gained momentum with leaders seeking to protect their nations’ economic interests, mainly by creating trade barriers. During the 2016 US election campaigns, most Republicans made remarks that showed their bias for protectionism. Since his election as the 45th US President, Mr Donald Trump has constantly spoken about possible change of the existing foreign and trade policies, claiming they do not favour his country, claims most experts are sceptical about. In a recent address to the UN General Assembly, Mr Trump noted that his nation was systematically renegotiating broken and bad trade deals. Referendum In 2016, United Kingdom held a referendum and British voters opted out of the European Union. The scheduled exit March 29, next year, might, however, be halted following calls for a second referendum to remain in the EU. Those rethinking Brexit apparently realise that the UK stands to lose economically by going it alone. In the face of a changing global trade environment, African leaders should step up decision making to secure their economies. A World Bank report released early this year noted that 18 sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits. They include Angola, Ethiopia, Kenya, Ghana, Nigeria, Tanzania and Zambia. Development projects While some argue that the loans are meant for the much-needed development projects, the sceptics are jittery about the consequences in the event of default. In March, the African Continental Free Trade Area (AfCFTA), a regional body urged African states to join forces and promote the free movement of goods and services. If all the 55 countries join, it will be one of the world’s largest free-trade areas with $4 trillion in combined consumer and business spending. African policymakers must prudently craft policies geared towards unlocking their nations’ economic potential, while ensuring selfish interests do not hinder the opportunity for growth. If this does not happen, Africa will continue to be on the edge as major global powers engage in healthy policy debates and impose their ways on us with our leadership failing to develop clear strategies to uplift our people. The writer is a communications consultant at P & L Consulting Ltd. The views expressed in this article are of the author.
