Naudé, Wim (2010): Africa and the global economic crisis: A Risk assessment and action guide.
Download (702kB) | Preview
It is increasingly apparent that, despite earlier hopes, the global economic crisis will have a significant impact on the economies of Sub-Saharan Africa. In order to co-ordinate and craft the most appropriate responses for African economies to withstand and recover from the crisis, it is necessary to identify the degree to which the continent, as well as the individual African countries, is at risk of being negatively impacted. This depends on both vulnerability to trade and financial shocks, as well as the resilience of countries to cope with these shocks. Accordingly, vulnerability and resilience indices are constructed for the continent and individual countries. It is shown that, of all developing regions, Africa is the most at risk from the crisis: it has higher vulnerability to trade and financial shocks, and it has the least resilience of all regions. Based upon a vulnerability-resilience matrix, the African countries most at risk are the Democratic Republic of the Congo, Burundi, Côte D’Ivoire, Liberia, Angola, the Sudan, Chad, Guinea-Bissau, Guinea, Zimbabwe, Somalia, Kenya, Mali, Nigeria, Ghana, Cape Verde and Mauritania. With a few notable exceptions, such as Kenya and Ghana, these are all ‘fragile states’. Based upon the distinction between vulnerability and resilience, an action guide is proposed. This makes a distinction between short-term and longer-term actions, in particular between actions aimed at mitigating the impact of the external shocks, assisting countries to cope, and actions aimed at reducing risk.
|Item Type:||MPRA Paper|
|Original Title:||Africa and the global economic crisis: A Risk assessment and action guide|
|Keywords:||Africa;Global Economic Crisis; Vulnerability|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa
|Depositing User:||Wim Naude|
|Date Deposited:||13. Jan 2010 23:52|
|Last Modified:||14. Feb 2013 04:06|
African Development Bank (AfDB) (2009a). The African Development Bank Group Re-sponse to the Economic Impact of the Financial Crisis. Tunis. March 2009.
African Development Bank (AfDB) (2009b). An Update on the Impact of the Financial Crisis on African Economies. Issues Paper Prepared for the C-10 Meeting, Dar-Es-Salaam, Tanzania, 11 March 2009.
Arbache, J.S. and Page, J. (2007). ‘More Growth or Fewer Collapses? A New Look at Long-Run Growth in Sub-Saharan Africa’, World Bank Policy Working Paper # 4384. Washington DC: The World Bank.
Arbache, J.S. and Page, J. (2008). ‘Good and Bad Times: Volatility and Growth in Africa’, WIDER Angle, no. 1/2008, United Nations University, Helsinki, Finland (pp. 8-9).
Baliamoune-Lutz, M. and McGillivray, M. (2008).’State Fragility: Concept and Measure-ment’, UNU-WIDER Research Paper 2008/44. Helsinki: WIDER.
Birdsall, N. (2007). ‘Do No Harm: Aid, Weak Institutions and the Missing Middle in Africa’. Development Policy Review, 25 (5): 575-98.
Bolt, J. and Bezemer, D. (2009). ‘Understanding Long-run African Growth: Colonial Insti-tutions or Colonial Education?’, Journal of Development Studies, 45 (1): 24-54.
Briguglio, L. (2004). ‘Economic Vulnerability and Resilience: Concepts and Measurements’. In L. Briguglio and E. J. Kisanga (eds), Economic Vulnerability and Resilience of Small States. Malta: Islands and Small States Institute and London: Commonwealth Secretariat.
Briguglio, L. Cordina, G., Farrugia, N. and Vella, S. (2008). Economic Vulnerability and Resilience: Concepts and Measurements. UNU-WIDER Research Paper 2008-55. United Nations University, Helsinki, Finland.
Briguglio, L. Cordina, G., Farrugia, N. and Vella, S. (2008). Economic Vulnerability and Resilience: Concepts and Measurements, Oxford Development Studies, 37 (3) (forth-coming)
Brown, G. and Stewart, F. (2007). ‘Fragile States’, Paper Presented at the UNU-WIDER Conference on Fragile States-Fragile Groups, United Nations University, Helsinki, Finland, 15 June.
Cannon, T. (2008). Reducing People’s Vulnerability to Natural Hazards: Communities and Resilience, UNU-WIDER Research Paper 2008/34, Helsinki, Finland.
Carment, D., Samy, Y. and Prest, S. (2008). ‘Determinants of State Fragility and Impli-cations for Aid Allocation: An Assessment Based on the Country Indicators for Foreign Policy Project’, UNU-WIDER Research Paper 2008/46. Helsinki: WIDER.
CIFP (Country Indicators for Foreign Policy) (2006). Fragile States: Monitoring and As-sessment, the Way Forward. Ottawa: Carlton.
Collier, P. (2006a). ‘African Growth: Why a ‘Big Push’?’. Journal of African Economies, AERC Supplement 2: 188-211.
Collier, P., and O’Connell S. (2007). ‘African Economic Growth: Opportunities and Choices’. In B. Ndulu, R. Bates, P. Collier and S. O’Connell (eds), The Political Econ-omy of African Economic Growth 1960-2000. Cambridge: Cambridge University Press.
EC (European Commission) (2009a). ‘Supporting Developing Countries in Coping with the Crisis. Communication from the Commission to the European Parliament, Com (2009) 160. Brussels.
EC (European Commission) (2009b).’Millennium Development Goals: Impact of the Fi-nancial Crisis on Developing Countries’. Commission Staff Working Document 445/2. Brussels.
Eichengreen, B., Mody. M., Nedeljkovic, M. and Sarno, L. (2009). ‘How the Sub-Prime Crisis Went Global’, NBER Working Paper 14904, Cambridge MA: The National Bureau of Economic Research.
Fosu, A. (2007). ‘Policy Syndromes and African Economic Growth’, WIDER Angle, no. 1/2007, United Nations University, Helsinki, Finland (pp. 1-3).
Fosu, A. and Naudé, W.A. (2009). ‘The Global Economic Crisis: Towards Syndrome Free Recovery for Africa’, WIDER Discussion Paper DP2009/03, United Nations University, Helsinki, Finland.
Gennaioli, N. and Rainer, I. (2007). ‘The Modern Impact of Precolonial Centralization in Africa’, Journal of Economic Growth, 12 (3): 185 – 234.
Guillén, M.F. (2009). ‘The Global Economic and Financial Crisis: A Timeline’, The Lauder Institute.
IMF (2007). World Economic Outlook. Washington DC.
IMF (2009a). World Economic Outlook: Crisis and Recovery. Washington DC: International Monetary Fund (online at http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm#ch4fig).
IMF (2009b). Global Financial Stability Report. Responding to the Financial Crisis and Measuring Systemic Risks. Washington DC: International Monetary Fund. (online at http://www.imf.org/external/pubs/ft/gfsr/2009/01/index.htm )
IMF (2009c). Regional Economic Outlook: Sub-Saharan Africa. Washington DC: Interna-tional Monetary Fund (online at http://imf.org/external/pubs/ft/reo/2009/afr/eng/sreo0409.pdf)
Maimbo, S.M. (2008). ‘The Impact of the Financial Crisis on African Financial Systems’, Paper prepared for the AFPD field staff retreat 24-25 October (see http://siteresources.worldbank.org/EXTAFROFFCHIECO/Resources/sammaimbo_note.pdf accessed 21 April 2009).
Morris, C.R. (2008). The Two Trillion Dollar Meltdown. New York. Public Affairs.
Naudé, W.A. (2004). ‘The Effects of Policy, Institutions and Geography on Economic Growth in Africa: An Econometric Study Based on Cross-Section and Panel Data’, Journal of International Development, 16: 1- 29.
Naudé, W.A., and W.F. Krugell (2007). ‘Investigating Geography and Institutions as Determinants of Foreign Direct Investment in Africa Using Panel Data’. Applied Economics, 39 (10): 1223-33.
Naudé, W.A., and M. Matthee (2007). ‘The Significance of Transport Costs in Africa’. United Nations University Policy Brief 6. Tokyo: UNU.
Naudé, W.A. and Saayman, A. (2005). The Determinants of Tourist Arrivals in Africa: A Panel Data Regression Analysis, Tourism Economics, 11(3):365-391.
Ndulu, B.J., L. Chakraborti, L. Lijane, V. Ramachandran, and Wolgin J. (2007a). Chal-lenges of African Growth: Opportunities, Constraints and Strategic Directions. Washington, DC: World Bank.
Ndulu, B., Bates R., Collier P., and O’Connell S. (2007b). The Political Economy of African Economic Growth 1960-2000. Cambridge: Cambridge University Press.
Taylor, J.B. (2009). ‘The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong’, NBER Working Paper 14631, Cambridge MA: The National Bu-reau of Economic Research.
Warner, A.M. (2002). ‘Institutions, Geography, Regions, Countries and the Mobility Bias’. CID Working Paper No. 91. Cambridge, MA: Center for International Development at Harvard University.
World Bank (2009). Global Economic Prospects 2009: Forecast Update. Washington DC: The World Bank (DEC Prospects Group, 30 March).