Happy 9/25!

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Kimberly Adams (0:31)

With world leaders gathering in New York, a check in on how the US's war with Iran is affecting economies in Africa.

From Marketplace in Washington, I'm Kimberly Adams. Leaders and policymakers from across the globe are meeting in New York for the United Nations General Assembly, and the ongoing conflict in the Middle East is top of mind for many member nations including countries in Africa. For more on how the conflict is affecting economies on the continent, I'm joined by Mavis Owusu-Gemfi, a political economist and president and CEO of the African Center for Economic Transformation. Mavis, welcome.

Mavis Owusu-Gemfi (1:06)

Thank you very much, Kimberly, for having me back.

Kimberly Adams (1:09)

How are the various parts of the continent feeling the economic pressures of this war domestically?

Mavis Owusu-Gemfi (1:15)

Most African countries are net oil importers, so higher and more volatile oil prices feed into transport, electricity, food distribution, and the cost of basic goods. So for households on the continent, the war has quickly become a cost of living shock.

Agriculture is exposed to because farmers rely on fertilizer alongside fuel and transport. If these costs rise, food prices and food security come under pressure, and we're already starting to see that in the Horn of Africa and in the Sahel. Now, trade is also at risk, especially when strategic routes such as Gulf of Aden becomes unstable and shipping costs rise. So this is why our governments are thinking harder about resilience, including stronger refining capacity, more reliable regional supply chains, and increased domestic production. South Africa is a good example of this defensive approach that many governments on the continent are taking. It is stockpiling fuel and urgently trying to revive domestic refining capacity after years of relying heavily on imported fuel.

Kimberly Adams (2:26)

Back in the spring, Chinese President Xi Jinping promised that China would implement zero tariffs on 53 African countries, taking basically an opposite approach from President Trump to tariffs. How has that been playing out so far?

Mavis Owusu-Gemfi (2:41)

A lot of countries are really thinking through this. A lot of countries are looking at the fundamental challenges to its industrialization policy. So how do you improve access to energy?

How do you enhance labor productivity? How do we better use technology? The challenge is building the product that makes you competitive to be in that market. So I'm really excited about African countries stepping back and asking, where are the opportunities? Where are the value chains? What are the few things we can do that will enable us to take advantage of this trade and opportunity that China has given us? So it's a space to watch Kimberly. We are not there yet. The door has been open. The onus is now on us to build the products to enable us to compete in the Chinese market effectively.

Kimberly Adams (3:34)

China has already invested for decades, quite a bit in Africa and building relationships there. I'm thinking about the Belt and Road Initiative and other things. With this latest move and China trying to develop even deeper trade ties with African countries, what does that mean, do you think, for the United States trade relations there?

Mavis Owusu-Gemfi (3:57)

We are looking at the type of partnerships that enables us to really realize our own agency. We are simply not choosing between Washington and Beijing, as the world is thinking. What we are thinking about is working with multiple partners, avoiding dependency and choosing arrangements that support African priorities.

Kimberly Adams (4:22)

Mavis Owusu-Gemfi is a political economist and president and CEO of the African Center for Economic Transformation. Mavis, thank you so much.

Mavis Owusu-Gemfi (4:31)

Thank you for inviting me again, Kimberly.

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Kimberly Adams (5:25)