The Global Financial Crisis and African Economies: Impact and Transmission Channels

"This paper is intended to highlight the general impact of the crisis on African countries in terms of economic performance and then show some variations across countries by discussing how the different transmission channels operated in them, and what their effects have been so far or will be in the near future. The paper will argue that essentially the impact to date has been determined largely by the initial conditions prevailing in each country and the speed and nature of government responses, as already indicated. Section 2 of the paper will provide a broad overview of aggregate economic performance in Africa in the crisis period. This will look at the general performance in terms of growth and what the prognosis has been on welfare indicators, particularly poverty. In section 3 the discussion will focus on the transmission channels through which the effects have been observed, namely international trade,private capital flows, aid, remittances and competition among financial institutions. Section 4 of the paper will briefly explain the varied impacts looking at initial conditions and using Tanzania and Ghana for illustration. Section 5 will conclude."