Economists seek solutions to Africa’s new challenges

Leading economists from across Africa are meeting in Nairobi to discuss the continent’s economy.

The meeting, which will draw government policy makers and central bank governors, comes at a time when the continent is facing a daunting task as a result of the global economic crisis.

The full effect of the crisis is yet to be quantified and their long term effect noted.

The African economy is undergoing one of its biggest challenges in years as the global economic crisis bears its weight on the bristle economies of the continent.

The aftershock of the crisis that originated in the US and Europe has dragged down African economies which were on a trajectory of growth.

African economies are under grave challenges as the achievements of the past decade are likely to be eroded. In addition, the threat is likely to weaken exports, reduce remittances flow and earnings from tourism, and lead to a decline in foreign direct investment (FDI).

Global rising prices for primary commodities have been the driving factor for many African economies which recorded resurgence growth.

The conference, to kick off on Thursday, is organised by the African Economic Research Consortium (AERC) a Pan-African research think tank, in conjunction with the Global Development Network (GDN), and Overseas Development Institute (ODI).

Economic crisis

The conference, which is the 31st plenary session to be held by the AERC, will focus on Central Banking in a changing African Environment.

“The conference is a network of African leading economic researchers who will focus on critical economic issues and how to inform policy makers,” said an official of AERC who sought anonymity as he is not the official spokesperson for the organisation.

According to the official, the conference to be attended by 200 economists, will look at emerging issues facing Africa such as plummeting prices for primary commodities, falling remittances and how to address new challenges brought about by the global economic crisis.

The shift of African economies to market driven economies have resulted in opening up to foreign investments.

The participation of investors in sectors such as capital market, exploration of natural resources has led to tremendous growth.

However this has led to emerging challenges such as dependency on single or few commodities for export, flow of hot funds into emerging equity markets and lack of value addition on locally produce hence low market value.