Taurai Chiraerae: Africa's Financial Crisis Aftermath


Taurai Chiraerae is a research facilitator in AFRODAD working on economic governance. The African Forum and Network on Debt and Development (AFRODAD) is a panafrican organisation located in Harare, Zimbabwe.

„AFRODAD aspires for an equitable and sustainable development process leading to a prosperous Africa, and our mission is to secure policies that will redress the African debt crisis based on human rights value system“. http://www.afrodad.org/    

Contrary to the orthodox view that the financial crisis would not be a great problem for African economies because Africa had no money to speculate in stock exchanges, it became clear months later that people in Africa were affected by the negative impacts through less remittance, less trade and higher prices for food and fuel. African economies had enjoyed half a decade of economic growth of above 5%, however the recent forecast of economic growth have been revised downwards to a mere 2%, diminishing from the 2008 growth rate of 5.2%.1 The financial crisis threatens to erode the benefits accumulated over years of reforms in Africa.2 

Export oriented economies have been hit hard by the crisis. The global economic downturn has reduced demand for Africa’s exports, caused a decline in commodity prices, and a reduction in export earnings across the continent.3 Mining activities constitute large shares of the economic activities such as DRC, Zambia and Botswana. On the import side there has been a depreciation of Africa’s imports and import bills.4 The stock markets and the banking sector has been affected through limited access to capital markets i.e. borrowing from advanced economies, foreign ownership of banks and exposure to the sub-prime market. In Ghana for example remittance shrunk by $95million in 2009 from its 2008 levels and this has been catastrophic for Ghana’s poorest families. The World Bank estimates that the crisis has cut financing for health, education, social protection and infrastructure in 60 poor countries in 2009 by $11.6 billion.5   

Policy Response

Most African countries have implemented policy responses to salvage their economies from a crisis that they didn’t trigger, but for which they carry a substantial burden. Good political and corporate governance to restore market confidence, attract private capital inflows and investment to promote economic growth has been the centre motive in structural reforms for these countries. As African leaders acknowledged that the financial crisis still poses challenges and opportunities, South Africa President, Jacob Zuma alludes “The challenge comes back to the leadership: Are we able to see those opportunities and are we able to utilize the appropriate structures to take advantage of them”.6 More widely, the impact of the financial crisis has been grave on longstanding under-investment in infrastructure, especially in energy and agriculture, and the rising costs in health delivery. In addition astronomical proportions of unemployment have been attained and the vicious cycle of poverty has been deepened since the crisis has limited the ability of policy makers to combat these issues effectively.

A number of African countries were able to take counter measures to the financial crisis without jeopardizing their long term macro-economic positions. Angola, Botswana and Nigeria which are resource rich countries have cushioned the impact of the global crisis with the build up of reserves acquired in substantial current account surpluses of 11% GDP and a fiscal surplus of 6.7% over the four years from 2005-2008.7 These reserves have insulated their economies from the early shocks of the crisis.

Counter Measures

Several middle income countries have adopted measures to ease the ferocious impact of the crisis. Fiscal stimulus packages, new regulations in the banking sector, targeted sectoral assistance and capital and exchange controls have been amplified in these countries. In South Africa the banking sector has remained sound hence unconventional measures on final stability were not necessary.8 Morocco introduced an emergency plan in 2009 which focuses on major export industries and provides state guarantees for a substantial portion of bank credits to these industries. Government expenditure in Kenya increased by 25% and most stimulus projects will be implemented in 2010 to improve the business environment. The East African region has fared fairly well with solid continued economic growth performance accredited to greater integration combined with lower dependence on the global economy. Business environment was improved through government expenditure on infrastructure in Tanzania where roads and energy projects in 2009-10 increased the budget by 30%.9 Nigeria Central bank injected funds into the banking system in August 2009 when the five leading banks posted losses due to excessive lending to the energy sector and the burst of the stock market.10

While developed countries devoted more attention to their economies during the financial crisis, there are already concerns that some impoverished countries that are at moderate or high risk of debt distress due to export and income shortfalls, as well as the impact of currency devaluations may result in a recycled debt crisis. The economy of Africa has emerged from the crisis fragile and bruised but the lesson of the crisis is that this continent has to be more integrated to reduce risks and exposure and the short term exist strategies implemented have been commendable.


AFRODAD envisages that the rich nations responsible for the financial crisis and climate change should honor their pledged funding to Africa. It is important that climate issues are not neglected at this juncture, therefore funding to assist African countries and cope with climate change must be disbursed to all African countries. They should pursue strategies that boost demand for African exports and capital inflows. Lastly international surveillance by the IFIs should not undermine the African countries development agendas, but ensure that sound macroeconomic policies should be religiously adhered to and improve capital inflows to the continent. (2. März 2010)

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End notes

2. Africa Economic Outlook 2008/9 

3. “IMF Pushes on Aid for Africa, Revival of World Trade Talks”; “IMF to Assist Africa Hit Hard by Global Downturn.” U.S.-African Trade Profile – 2009

4. Africa Development Bank. Policy Brief on the Financial Crisis. Impact of the financial crisis on African economies. An Interim Assessment. No1 / 2009

5. Finance and Development, Dame Barbara Stocking, The Poor should not pay the price of the Crisis, December 2009

6. http://www.weforum.org/pdf/Africa2009/africa09/drivers.htm

7. Journal for Globalization and Development: Africa; Africa’s Counter-Cyclical Policy Responses to the Crisis. Vol 1, Issue 1, Article 16. 2010

8. Mminele A.D (2009), “Recent economic Developments in South Africa” Remarks at the Citigroup Global Issues Seminar, Istanbul, 4 October 2009.

9. Mhango (2009) Africa: Insight-Fiscal Stimulus Packages Delivered in the East African Budgets, Standard Bank, June 2009

10. Africa Research Bulletin: Nigeria Bank Bailout Vol 48, 18363A-18367C, 2009

Weiterführende Informationen zur Finanzkrise

Weltwirtschaft und Entwicklung: „Tobin or not Tobin: Die Finanztransaktionssteuer. Konzept, Begründung, Effekte“. Das Hintergrundpapier vom Dezember 09 geht auf die Finanztransaktionssteuer ein. Stephan Schulmeister diskutiert ihr Für und Wider und dokumentiert die empirische Evidenz, die für ihre Einführung spricht. www.weltwirtschaft-und-entwicklung.org

WIDE: „Kassasturz. Finanzkrise und Entwicklung aus feministischer Perspektive“. Das Netzwerk Women in Development Europe hat im Jänner ein Positionspapier zur globalen sozialen, ökonomischen und ökologischen Krise herausgegeben. Das Papier umfasst u.a. Kapitel zu Auswirkungen auf Frauen, wer zahlt die Krise, Maßnahmen auf internationaler Ebene und endet mit der Forderung nach einer breiteren Sicht auf die Ökonomie. Zuletzt werden Auswege aus der Finanz- und Wirtschaftskrise angeführt und was davon Österreich, die EU bzw. die internationale Gemeinschaft leisten kann. www.wide-netzwerk.at

Brigitte Young/Helene Schuberth: The global financial meltdown and the impact of financial governance on gender. Im Garnet Policy Brief Nr. 10 vom Jänner 2010 werden die Risiken der Finanzkrise auf bereits bestehende Gender-Ungleichheiten angeführt, andererseits wird die Krise auch als Chance für eine neue Finanzarchitektur gesehen. Das Papier endet mit Empfehlungen an die Politik. www.garnet-eu.org

Oxfam: “Women Paying the Price": The impact of the global financial crisis on women in Southeast Asia”. Oxfam GB Research Report vom Februar 2010

World Bank: „Global Economic Prospects 2010: Crisis, finance and growth“. Der Bericht warnt davor, dass während das Schlimmste der Finanzkrise vorbei sein wird, der globale Aufschwung fragil ist. Die Weltbank erwartet, dass das globale BIP heuer um 2,7% wächst, 3,2% im Jahr 2011. Der Weltbankbericht geht auf die einzelnen Regionen ein: in Sub-Sahara-Afrika ist das Wachstum auf unter 1% gesunken (während der letzten fünf Jahre: durchschnittlich 5%), vor allem als Ergebnis des Kollaps des globalen Handels.

Jomo Kwame Sundaram: „Neues Denken in der Armutsbekämpfung“. Laut FAO ist die Zahl der Hungernden in der Welt im letzten Jahrzehnt gestiegen. Die Weltbank erklärte dagegen 2008, dass die Zahl der Armen bis 2005 deutlich zurückgegangen sei. Wie lassen sich Feststellungen wie diese miteinander in Einklang bringen, wo doch Armut in erster Linie über das Geldeinkommen definiert wird, das nötig ist um Hunger zu vermeiden? Das fragt sich J.Kwame Sundaram, der Untergeneralsekretär der Vereinten Nationen für wirtschaftliche Entwicklung. www.weltwirtschaft-und-entwicklung.org

Weiterführende Informationen zum IWF

„IWF-Kredite in der globalen Wirtschaftskrise“. Global+ Dokument der Alliance Sud. In der Asienkrise Ende der 1990er Jahre trug der IWF mit seinen harschen Kreditauflagen maßgeblich zur Verschärfung der Rezession bei und verlor in der Folge viel an Einfluss und Legitimation. Trotzdem hat er seit dem Ausbruch der aktuellen Finanzkrise wieder massiv an Bedeutung gewonnen. Das Papier untersucht, ob und wie sich seine Kreditkonditionalitäten seither verändert haben. www.alliancesud.ch

Dani Rodrik: „Renaissance von Kapitalverkehrskontrollen. Warum ist der IWF so stur?“ Der IWF hat seit der Krise richtig gehandelt. Er hat schnell reagiert, um neue Kreditlinien für angeschlagene Schwellenländer einzurichten. Er hat seine Kreditkonditionen zeitgemäß umgearbeitet. Doch warum macht es der IWF Menschen wie ihm so schwer ihn zu lieben, fragt Dani Rodrik, Professor für Politische Ökonomie der Univ. Harvard. Informationsbrief Weltwirtschaft & Entwicklung vom 13.11.2009. 


Nuria Molina: „Neuer makroökonomischer Ansatz beim IWF? Die Selbstkritik des Chefökonomen“. Im neuen Papier des IWF „Rethinking Macroeconomic Policy“ konzediert Olivier Blanchard (IWF-Chefökonom), dass die makroökonomische Politik, die der IWF in den letzten 30 Jahren vertreten hat, in mancherlei Hinsicht falsch war. Dazu gehören die extrem niedrigen Inflationsziele, die Vernachlässigung der entscheidenden Rolle der Fiskalpolitik und die Deregulierung im Finanzsektor, die oft als Bedingungen an Kredite für Entwicklungsländer geknüpft waren und viele Krisen nur verschärft haben. Informationsbrief Weltwirtschaft & Entwicklung vom März 2010. www.weltwirtschaft-und-entwicklung.org

Rethinking Macroeconomic Policy, IMF Staff Position Note vom 12. Februar 2010. Olivier Blanchard, Giovanni Dell’Ariccia, Paolo Mauro. 

Interview mit Olivier Blanchard, IWF-Chefökonom

EURODAD: „When facts change, I change my mind. What will you do, IMF?“