By MICHAEL EBOH
Analysts at Standard Bank, parent company of Stanbic IBTC Bank Plc, have called on African countries to prepare for a decline in aid and trade flows with Japan, following the crisis presently rocking the Asian country.

According to the analysts, Simon Freemantle and Jeremy Stevens, “Africa should brace itself for a decline in aid and trade flows with Japan following the devastating earthquake last week that hit the world’s third-largest economy.”

The research analysts noted that the total value of bilateral trade between Africa and Japan in 2010 stood at $24 billion, a 30 per cent improvement on 2009.

They warn that the earthquake and resulting tsunami, which has so far left an estimated 16,000 people dead and about 400,000 more homeless, will have a material impact on African markets and economies because of the considerable linkages between Japan and Africa.

They further stated that the negative economic spill-over effects are expected to further add to the already sluggish global economy.

“Quite clearly, African countries must prepare for an inevitable decrease in trade and aid volumes with Japan in the near and perhaps even medium-term,” noted Freemantle and Stevens.

“The linkages between Japan and Africa — both direct and indirect,” they declared, “Are certainly substantial. Therefore, any renewed bout of risk aversion, dent in external demand, shelving of investment, swings in terms of trade, and fall in aid commitments will be harmful.”

Freemantle and Stevens further noted that the net effect in the short term will be harmful for those economies most linked to Japan, with countries like South Africa expected to be most affected from a trade perspective.

“In terms of overseas development assistance, countries such as Tanzania and Sudan may feel the pinch, while from an investment perspective, Africa’s larger economies, particularly South Africa and perhaps Nigeria will experience “marginal compression,” they said.