Africa accounts for only two per cent of global trade, but the continent is not immune from global trade tension.
Already, South Africa is already a major casualty of the US-China trade war. South African financial markets are more sophisticated than other markets on the continent. The South African economy is also more integrated with the global economy.
Therefore, the vulnerability of the economy to exogenous shocks is much higher than less integrated African economies.
Bismarck Rewane, chief excutive of Financial Derivatives Company (FDC) Limited said, this is illustrated by the volatility of the rand relative to other African currencies. The rand has been one of the worst-performing emerging-market currencies, losing 9.8 per cent of its value in the last 2 months. Other factors such as slow domestic growth and policy uncertainty have also contributed to the currency’s weakness.