A Perspective From Africa

Posted by on Oct 24, 2013

A Perspective From Africa

Africa is caught in the cross fire of the poor governance of the G7 financial markets and the near collapse of the value system within the ‘states’ and ‘markets’ in these societies, particularly within OECD. Although Africa had no role whatsoever in causing the financial and economic crisis, the prevailing economic meltdown has put at risk Africa’s growth and development prospects. In its latest update, the International Monetary Fund predicts that, as a direct consequence of the global economic crisis, Africa’s growth will drop to a low of 3.4 per cent, or less, in 2009. This is contrasted with 6.2 per cent economic growth in 2007, followed by 5.2 per cent in 2008. Africa’s integration into the global economy meant that through trade, FDI, migrant remittances, and ODA, the global financial and economic crisis spread to the continent. Moreover, with worsening growth projections for Africa’s main development partners in 2009, the continent is bound to be saddled with the implications of the fall in foreign direct investment, export earnings, number of tourists, overseas development aid levels, the value of national currencies, and remittances from migrant workers. Already a number of African countries are under severe stress, politically, and socio-economically.


Significantly, the deepening economic crisis exacerbated the serious political and socio-economic challenges already being experienced in Africa. The “crisis” before the current crisis involved poverty, underemployment, rising inequality, unfair globalization and difficult social conditions for large segments of Africa’s population.

The financial and economic crisis comes at a time when Africa is only beginning to recover from the effects of the food and fuel crises. To ameliorate the adverse consequences and to avoid further damage to the social fabric of the continent, it is vital to recognize that no country or region alone can deal with the consequences of the crisis, hence global, coordinated solutions are called for.

More importantly, a profound mindset shift, underpinned by a new set of moral and ethical value system, is required. The hegemonic practices, exploitative objectives, and historic maneuverings have to end. The global response to the crisis must be value-driven, people-centric and pursue the overarching objective of alleviating the burden of the economic downturn on people, especially the vulnerable groups. To this end, the removal of the existing barriers to a fair global trade system is a major first step. The elimination of agriculture subsidies in OECD and currency manipulations by China and others should receive serious and immediate attention.

Over the past year, there has emerged a growing implicit protectionism within G8 member countries. Such creeping protectionism is detrimental to global recovery and growth. Together with the so-called fiscal stimuli introduced by the G8 countries and others, the focus thus far has been on narrow national interests. Understandable as it might be, such short-termism and politically driven initiatives have detracted attention from some of the root-causes of the global crisis. From African’s vantage point, the G20 leadership’s focus should be on strengthening and restructuring multilateral institutions, with a view to urgently transforming them on the basis of sound and equitable governance principles. Genuine and coherent economic policies as well as the reform of the global economic governance architecture will have to form an integral part of an effective response to the crisis. De-globalization and segmentation of the global socio-economic system is a false and counter-productive tendency that cannot serve Africa’s interest over time.

Strengthening continental structures is another requirement of an effective and sustainable response to the situation. This in turn necessitates a more credible commitment by the richer nations to their global aid commitments. Thus far the track record of the richer nations in this regard has left much to be desired. It is common in times of crises for the leaders, G8 or G20, to make popular commitments and subscribe to politically correct goals. However, it is the delivery of the promises and the genuine removal of structural, institutional and policy barriers that would set the world economy on the path of recovery.

Alongside G20 leaders, a critical responsibility rests with the leaders within Africa- political, social and intellectual- to respond to the crisis with a sense of empowerment, integrity and commitment. There is much that can be achieved within the continent, and that should be pursued with the urgency that the conditions demand. True, it would have been ideal if more African countries were represented at the G20 leaders’ table. That South Africa is the only African member country of G20 is no excuse for the other leaders to wait for the G20 decisions to embark upon some key initiatives that would stimulate economic activity, food production, and social cohesion on the continent.  After all, the track record of G20 leadership does not inspire much hope, and yet the severity of the socio-economic circumstances demand visionary and committed leadership now.v