The impact of the escalating global trade war is likely to shave 0.1% off South Africa's gross domestic product (GDP) baseline forecast in 2019 and 0.2% in 2020, according to Fitch Ratings' June 2018 "Global Economic Outlook" baseline forecast.
Fitch forecast that the escalation in the trade war is likely to reduce the world GDP by 0.4% in 2019 and by 0.3% in 2020.
"An escalation of global trade tensions that results in new tariffs on $2trn in global trade flows would reduce world growth by 0.4% in 2019, to 2.8% from 3.2%," the Fitch Ratings said in a statement on Wednesday.
The US, Canada and Mexico would be the most affected countries. Fitch expects China would be less severely impacted, with GDP growth around 0.3% below the baseline forecast. Fitch points out that China would only be affected directly by US protectionist measures, whereas the US would be imposing tariffs on a large proportion of its imports, while being hit simultaneously by retaliatory measures from four countries or trading blocs.
"The imposition of further tariff measures currently being considered by the US administration and commensurate retaliatory tariffs on US goods by the EU, China, Canada and Mexico would mark a significant escalation from tariff measures imposed to date," according to Fitch.
"The tariffs would initially feed through to higher import prices, raising firms' costs and reducing real wages. Business confidence and equity prices would also be dampened, further weighing on business investment and reducing consumption through a wealth effect."
Export competitiveness in the countries subject to tariffs would decline, resulting in lower export volumes. The negative growth effects would be magnified by trade multipliers and feed through to other trading partners not directly targeted by the tariffs. Import substitution would offset some of the growth shock in the countries imposing import tariffs.
Fitch forecasts that most countries not directly involved in the trade war would see their GDP falling below baseline, though generally at a much lower scale.
Net commodity exporters would be more severely hit, as slower world growth would push oil and hard commodity prices down. On the other hand, for some net commodity importers, the benefits from lower hard commodity prices would more than offset the impact of lower world growth.
Lagos State Governor, Mr. Akinwunmi Ambode on Tuesday tasked the Federal Government to do everything within its powers to revive existing Ports in other States of the federation so as to bring about permanent solution to the perennial traffic congestion in Apapa axis of the State.
Governor Ambode, who spoke at the Third Quarter Town Hall Meeting, the 12th in the Series, held at the Community Primary School, Iberekodo in Ibeju Lekki Local Government, said the recent chaos witnessed in the area was beyond traffic issues, saying that concerted efforts must be made to revamp moribund ports.
According to him, beyond getting other ports up and running, the issue of tankers queuing up to lift petroleum products from Tank Farms in Apapa was also a major issue causing gridlock and damaging road infrastructure in the area, which according to him was inimical to the economic growth of not just the State, but Nigeria in general.
“It would be very unfair to Lagosians if I don’t talk about issues relating to traffic management and integrated transport management most especially what we have witnessed in the last one week in Apapa, but again I would like to tell Lagosians that every stakeholder that is relevant to resolving the Apapa crisis, we have gone to work and you can see that there is a major improvement.
“But again, this issue has become perennial and in the last six years, it’s always been there, it comes and goes, but the challenge is to be able to find a permanent solution and in that reason Mr. President had directed the Vice President to come and see what the situation is and to actually give us a permanent solution. We are grateful Mr. President, we believe strongly that every layer of government should collaborate to be able to resolve this Apapa crisis.
“But we all must know that Apapa crisis is more than traffic issues. That is where all States depend on for revenue through Customs because the revenue is shared at FAAC. If anything goes wrong in the Port, whatever they get from Federal Allocation Account Committee (FAAC) could reduce,” Ambode said.
Stressing that the Apapa congestion was a national issue that required urgent attention, the Governor also noted that oil pipelines should be revived to discourage the trend of thousands of trucks coming from other parts of the country to lift petroleum products from Apapa.
“It is bad that we still use truck to lift petroleum products from Apapa to other parts of the country. As it is now, other ports in Nigeria must begin to work immediately to decongest gridlock in Lagos. Whatever has led to continual use of trucks to lift fuel, which is, vandalism of pipeline should be addressed immediately.
“We believe that this will allow the roads to become free. We don’t need to continuously use tax payers’ money to build road that were destroyed by tankers. We call on the Minister of Petroleum and Department of Petroleum Resources (DPR) to work towards reviving the pipelines,” he said.
The governor also expressed concern about the approval for the development of tank farms in Ijegun area of Lagos, saying that as much as the State supports redistribution of tank farms, such should be located in areas that are not populated.
“We don’t need tank farms within Lagos metropolis anymore. There are 68 tank farms in Apapa alone. That is a serious danger waiting to happen. Beyond Apapa, they have approved tank farms in Ijegun axis and that is where we have huge population.
“We need to redistribute tank farm establishment to outer borders and other parts. This is what we believe should be done at this moment to free Lagos roads,” he said.
Speaking on the efforts of his administration to develop the economy of the State, Governor Ambode said his administration has continued to keep faith with its mandate to ensure that the future of Lagos remains on a sound pedestal.
He said the Town Hall meeting, which had moved round the three senatorial districts in the State from its first edition held in October 6, 2015 has continued to provide the Government with first hand information on the needs of the people and how best to solve them.
“Our promise from the very beginning was that we are going to give you a government of inclusion and it’s very clear that we are on track. When we look at our scorecard, which is to keep Lagos on a trajectory of growth and development, we are on that track.
“We are happy to be here. We are everywhere meeting the needs of our people, asking them what the issues are and wanting to respond positively to those issues. Yes, we are not perfect, we would try our best but our people know that we are doing things that would create prosperity for their future,” Ambode said.
Besides, the Governor said that his administration was not oblivious of the fact that the Eastern and Western axis of the State were pivotal to the future prosperity of Lagos.
Giving an insight on the next plan of action for the Ibeju Lekki axis, Governor Ambode also said the construction of the Epe Airport and reconstruction of the Coastal Road were very much on course, adding that the dualization of the Eleko Junction to the T-Junction would commence in January 2019, while the 27 network of roads in Ojokoro, Ayinke House, among others would be completed before the next quarter.
The governor, while thanking traditional rulers, community heads and residents of Ibeju Lekki for their unflinching support towards the advancement of the multi-billion dollar projects ongoing in the Lekki Free Trade Zone assured that all issues relating to compensation would be resolved before the end of the week.
Ambode also announced the commencement of recruitment of 1,000 teachers in the State, adding that more would be recruited as the need arises.
Taking questions from residents, Ambode said his administration would go back to the drawing board and respond accordingly to issues raised, appealing to residents to be patient as the Government would continue to deliver more life changing projects to make life more comfortable for the people.
A physically challenged resident and graduate of Computer Studies, Micheal Ogunyemi who said he had been jobless for five years could not hold back his joy as the Governor directed the Civil Service Commission to grant him immediate employment from August 1, while relevant agencies were directed to address various issues raised by residents.