Africa and the Global Economic Crisis: Impacts, Policy Responses and Political Economy

摘要

Abstract: The global financial and economic crisis, which hit Africa with a lag, has caused serious setbacks to the continent's growth momentum and likely jeopardized hard-won development gains of recent years. Even though most African countries are likely to avoid recession, the sharp drop in growth rates can have serious, long-term consequences, especially for poor and vulnerable Africans. Furthermore, the speed of the continent's recovery and longer-term growth rates remain uncertain. What is, however, remarkable is that unlike in previous crises (as the energy crisis in the 1970s), this time round the response of most African governments has been to continue with the prudent macroeconomic policies of the past decade, and it is these policies that are giving these countries the fiscal space with which to cushion the impact of the global crisis and avoid an even deeper recession. The emergency rescue packages that some countries introduced are also carefully designed to maintain reform momentum in the medium term. At the same time, some countries have used the crisis as an opportunity to accelerate reforms, leaving them in a better position to take advantage of a recovery in the global economy. Thus, while the global crisis has wreaked havoc on African economies, the policy response of most governments demonstrates that the overall policy environment in Africa remains sound. This paper provides three hypotheses to explain this policy response, which stands in some contrast with African governments’ responses to previous crises. First, the prudent macroeconomic stance taken by these countries is simply a reflection of their access to capital markets and thin domestic financial markets. Second, the experience of the past decade, where prudent macroeconomic policies resulted in countries being better able to respond to the crisis, created an environment where governments were reluctant to deviate too far from their macroeconomic stance, lest they be left vulnerable during the next crisis. And third, that there has been a shift in the public's attitude towards economic reforms, and African policymakers were reflecting this shift in their policy responses to the crisis. The paper concludes that if this third hypothesis is the most likely one, it bodes well for Africa's future, despite the global crisis. For it means that economic reforms in Africa will continue and will unlikely be reversed, even with a sluggish global economy, because the public's mind-set has shifted.