Despite the challenges China is facing as the coronavirus (Covid-19) and the tariff stand-off with the US continues to affect economies and erode trading positions, South Africa’s leading business partner still holds the cards for local growth.According to Standard Bank’s Sim Tshabalala, this position is also unlikely to change much, although indicators across the board are trending down.Speaking at an Africa Outlook 2020 conference hosted by auditing firm Deloitte, the chief executive said that a downturn was predicted for China’s growth rate – from 6.1% last year to 5.8%.Tshabalala, though, spoke before countries across the east and west found themselves on the receiving end of a new aff liction that was initially underestimated.The 5.8% growth rate for 2020, in other words, could already have been adjusted down considering the supply-chain chokehold China is exerting on its trading partners – and vice versa – in a bid to curb Covid-19 from spreading.“Slow growth for China is inevitable given the high levels of development we’ve seen. It is also important, especially for Africa, to bear in mind that the Chinese economy is so enormous that its demand for our exports will continue to g row.”Whether this would continue to be “at a fast pa ce”, Tshabalala said, remained to be seen.He argued though that even when China’s economy slowed to moderate levels, “it’s happening off such a large base that it creates a lot of demand every year”.Unfortunately South Africa, although its intra-Africa trade partners are consistently showing growing demand for manufactured goods from the continent’s southern tip, is one of the most underperforming sub-Saharan economies, according to the International Monetary Fund (IMF).Looking at the local regional picture, Tshabalala said sub-Saharan growth was predicted to edge up to 3.5%, “slightly better than la st ye a r ".“The star performers are Ethiopia, Kenya and Ghana, whose economies are expected to grow by seven, six, and five percent respectively. Unfortunately Nigeria and South Africa are the laggards, with growth predictions of 2.4% and 0.4%.”Addressing delegates well ahead of last week’s news that South Africa had slipped into its second recession in two years, Tshabalala said “unless things change quickly South Africa will suffer another year of falling per-capita income and rising unemployment”.What will it take to add another notch to the country’s dismal growth prediction?Exactly what finance minister Tito Mboweni touched on during his budget statement.“Relax barriers to business and make the necessary regulatory changes to allow for more self-regulation and self-generation by large firms keen on producing their own electricity, and we might just see improvement.”Add to this “reforms by national treasury, the introduction of multi-year and e-visas for business people, completing a spectrum auction, and improving the operational performance of Eskom, and we may just be able to go to 1% of growth, or even two percent by the end of the year.”
INSERT: Nigeria and South Africa are the laggards, with growth predictions of 2.4% and 0.4%.– Sim Tshabalala