The Global Economic Crisis: Impact on Sub-Saharan Africa and Global Policy Responses
Abstract
Many analysts were initially optimistic that the impact of the global financial crisis on Sub- Saharan Africa would be negligible. Many African economies are little exposed to the global financial system, and African banks hold few of the "toxic assets" that helped spark the crisis. However, as the financial crisis has deepened into a global recession, most agree that Africa will be strongly affected. The International Monetary Fund (IMF) estimates that average economic growth in Africa will slow from an average of over 6% per year over the past five years to 1% in 2009, before rebounding to 4% in 2010. As a region, Sub-Saharan Africa is not expected to undergo a recession in 2009. However, most African countries are thought to require high rates of economic growth in order to outpace population growth and make progress in alleviating poverty. The mechanisms through which the crisis is affecting Africa include a contraction in global trade and a related collapse in primary commodity exports, on which many countries are dependent. Foreign investment and migrant worker remittances are also expected to decrease significantly, and some analysts predict cuts in foreign aid in the medium term if the crisis persists. Africa's most powerful economies have proven particularly vulnerable to the downturn: South Africa is experiencing a recession for the first time in nearly two decades, and Nigeria and Angola have reported revenue shortfalls due to the fall in global oil prices. Several countries seen as having solid macroeconomic governance, notably Botswana, have sought international financial assistance to cope with the impact of the crisis. At the same time, a number of low-income African countries are projected to experience relatively robust growth in 2009 and 2010, leading some economists to talk of Africa's underlying economic resilience. The 111th Congress has monitored the impact of the global economic crisis worldwide.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 19, 2009
- Accession Number
- ADA519037
Entities
People
- Alexis Arieff
- Martin A. Weiss
- Vivian C. Jones
Organizations
- Library of Congress