Global meltdown hits sub-Saharan Africa financing

African economies

But the academics argued, African economies had often not quite developed the robustness of institutions and structures for sustainable development, making them still vulnerable to severe external shocks and this was compounded by high food prices beginning in early 2007 through mid-2008.

“Just at the time that the food crisis was beginning to abate, African countries saw the world thrown into a situation of fast rising crude oil prices, against which many of them could do very little,” they wrote.

In another paper titled “Africa and the Global Economic Crisis: Impacts, Policy Responses, and Political Economy”, and authored by Offices of the chief economists at the African Development Bank and the World Bank Africa Region indicated that while “the severe global recession seems to be bottoming out and the global economic outlook is turning more positive, the impact of the crisis on many African countries continues to deepen.”

The economists’ presentation read: “The crisis hit the continent with a lag, but has caused serious setbacks to its growth momentum and jeopardised hard-won development gains of recent years.”

They said that the emergency rescue packages that some countries introduced are also carefully designed to maintain reform momentum in the medium-term.

A few countries have used the crisis as an opportunity to accelerate reforms, leaving them in a better position to take advantage of a recovery in the global economy, they concluded.

“In short, while the global crisis has wreaked havoc on African economies, the policy response of most governments demonstrates that the overall policy environment in Africa remains sound,” the economists wrote.