There is tremendous concern about the possible impact that slowing economic growth in China could have on Africa, owing to the fact that Chinese demand for resources has provided a critical underpin for recent economic expansion in a number of African countries.

However, African Development Bank (AfDB) chief economist Professor Mthuli Ncube, who arguably has better visibility than most of African economic trends and threats, is relatively sanguine about the immediate prospects. In fact, he is more worried about the possible nega- tive spillover effects from any disorderly tapering of quantitative-easing (QE) programmes than from slowing Chinese growth and that country’s desire to fundamentally alter the nature of its growth trajectory.

Ncube acknowledges that the current slowdown of the Chinese economy will impact on growth in African economies, especially those that export commodities. However, he does not anticipate that the fallout will be “catastrophic” and is still forecasting continentwide growth of 4.8% for 2013, having factored in a more modest expansion of 7% from the giant Asian economy this year.

The bank’s African Economic Outlook also stresses that the slowdown, from a growth rate of 6.6% in 2012, can largely be attributed to the impact of a strong Libyan economic recovery, following its recent political upheavals. In 2011, Libya contracted by 59.7%, but rebounded by 95.5% last year as oil exports resumed. Had the North African country been excluded from the 2012 figures, Africa’s growth would have been 4.2% in 2012.

Ncube says the AfDB is supportive of China’s efforts to rebalance its economy in favour of domestic consumption and away from resource-intensive investment, despite its potential to impact on commodity demand and prices. “The 7% rate of growth is a more sustainable rate of growth . . . and we think that this level of economic growth will still manage to [sustain] the upward trend in terms of demand for commodities,” he says.

Therefore, the slowdown in China has not been flagged as a risk to the growth outlook in itself. However, the associated risk of lower commodity export earnings is highlighted as one of five potential downside threats. The other risks listed include lower tourism earnings, particularly in North Africa, lower financial inflows, contagion effects on African banks and political risks associated with delayed reforms.

That said, any single percentage point decline in the growth of the large emerging economies, including China and India, will reduce overall African growth by 0.35 percentage points. The continent’s sensitivity to a slowdown in developed economies, such as Europe and the US, was larger, at 0.5 percentage points.

The AfDB is, thus, keeping a close eye on the possible economic consequences for Europe and the US from any tapering of QE.

While capital and currency markets in middle-income countries such as South Africa are likely to feel the effects of any move to reduce QE programmes, most African countries will be affected through the trade channel, should the pullback result in slowing developed- market growth.

“Therefore, we are very keen that there is an orderly exit,” Ncube avers.

Overall, though, the AfDB stresses that the economic outlook for Africa remains favourable despite headwinds from the global economy. “Growth has remained relatively broad-based, with oil production, mining, agriculture, services and domestic demand as the main drivers, mitigating the adverse effects from global turbulences.”