logo
  Join        Login             Stock Quote

Africa And The Great Recession: Changing Times

 May 14, 2012 09:33 AM


By Antoinette Sayeh

In previous global downturns, sub-Saharan Africa has usually been badly affected—but not this time around.

The world economy has experienced much dislocation since the onset of the global financial crisis in 2008. Output levels in many advanced economies still remain below pre-crisis levels, while unemployment levels have surged; growth in emerging market economies has slowed, but remains quite high.

But in sub-Saharan Africa, growth for the region as a whole has remained reasonably strong (around 5 percent), except for 2009 – where the decline in world output and associated shrinking of world trade pushed Africa's growth down to below 3 percent.

Some better than others

[Related -Bogle Says Indexing Destined To Win The Battle Of The Quants]

Of course, sub-Saharan Africa is a diverse region, and not all economies have fared equally well. The more advanced economies in the region (notably South Africa) have close links to export markets in the advanced economies, and have experienced a sharper slowdown, and weaker recovery, than did the bulk of the region's low-income economies.  Countries affected by civil strife (such as Cote d'Ivoire, and now Mali) and by drought have also fared less well than other economies in the region.

So why has most of sub-Saharan Africa continued to record solid growth against the backdrop of such a weak global economy?  And can we expect this solid growth performance to continue in the next few years?

[Related -VMAX and VMIN Poised to Be Most Important VIX ETP Launch in Years]

First, the economic situation in sub-Saharan Africa has undergone a fundamental change since the beginning of the millennium. As we show in the latest IMF Regional Economic Outlook for Sub-Saharan Africalaunched today in Lusaka, Zambiathe region has been growing consistently strongly for over a decade.

Critical to the region's recent success has been the steady progress and economic resilience of the region's 26 low-income and fragile economies. Average per capita incomes in these countries is still well under $2 per day, but total output has grown by more than 5 percent in every year since 2004. Furthermore, the share of investment in this output has risen steadily – from 18 percent in 2004 to 23 percent now.

This solid growth record has been supported by several factors, including significantly less civil conflict, the generally favorable commodity price developments benefiting Africa's natural resource exporters; and the extensive debt relief provided to most highly-indebted poor countries.


Next Page >>123
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageBogle Says Indexing Destined To Win The Battle Of The Quants

Vanguard founder John Bogle gave a powerful speech last month at the Q Group’s Spring Seminar that lays out read on...

article imageVMAX and VMIN Poised to Be Most Important VIX ETP Launch in Years

REX Shares is launching two new VIX exchange-traded products on Tuesday in what is likely to be the most read on...

article imageThe April 29 Gold Triangle Breakout Update

If you’re just watching stocks, you may be missing this powerful Triangle Breakout surge in read on...

article imageSell In May, But It Is A Presidential Election Year

With May just around the corner, articles covering the "Sell in May' phenomenon are not in short supply and read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

The April 29 Gold Triangle Breakout Update
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.