The wealthy can borrow money to finance their investment needs because bankers trust them. Those who are less well off, and who need loans the most, do not have this access and must call upon the solidarity of their family and community to finance their investments. The same logic can be used at the country level. High income countries borrow, while many poor African countries have a limited access to international capital markets. In recent years, only one fourth of sub-Saharan African countries were able to issue international bonds—and do not have any other alternative but to solicit international aid.
If you lived in Zambia or have been closely following the news about the country, you would know that Zambia had been growing at a steady pace in the last few years. Riding on the back of higher copper production, foreign direct investment in the manufacturing and mining sectors, government investment in infrastructure, and expanding private sector investment in construction and services, Zambia grew at an average annual rate of 6.4% between 2010 and 2014, which was more than the average overall growth rate of Sub-Saharan Africa.
Apres près d’une année et demie de crise politique, l’économie malgache résiste grâce à la timide reprise du secteur privé, mais notamment au boom du secteur informel.
The food, fuel, and financial crises during the last three years sent shockwaves throughout the world and its effects rippled across South Asia. It impacted growth, causing a reduction of growth by nearly 3% from the peak of 8.9% in 2007 to 6.3% in 2009, led to job losses, declines in stock market value, decreases in tourism, and increasing pressures on already weak fiscal, balance of payments, reserves and exchange rates.
I was based in New Delhi during the crisis, and the effects were palpable. For a moment, it looked as if confidence was ebbing---the construction cranes in Gurgaon (the fastest-growing township around Delhi) became silent, a young scholar at Delhi University ran a survey of what graduates might do as job markets became difficult, airlines ran half-empty and racked-up massive losses, jobs were lost heavily in diamond-cutting in Gujarat and IT firms stopped hiring in Bangalore, and people paused to consider the implications of such a dramatic change from the accelerating and heady growth of the previous years. But despite the circumstances, and thanks to strong and prompt government actions, confidence has swiftly returned, the region has proven to be quite resilient and a noticeable resurgence has taken hold.
At the launch, World Bank Africa Chief Economist Shanta Devarajan explained that, "although Africa was the hardest hit by the crisis, its recovery has been so remarkable that we could be at the beginning of what history will describe as Africa’s decade."
The outlook isn't all rosy, of course. With the global financial crisis halting the steady rate of growth in the region, Africa will now likely miss most of the Millennium Development Goals (MDGs) by their 2015 deadline, despite the remarkable progress. n estimated 7-10 million more Africans were driven into poverty and about 30,000-50,000 children died before their first birthday because of the crisis.
Madagascar’s economy has been in recession since the beginning of the political crisis in March 2009, and prospects for 2010 don’t look too promising. The prudent fiscal policy adopted by the Government will be increasingly difficult to sustain in 2010. Key financial indicators continue to be vulnerable to policy shifts and shocks, and export competitiveness losses have begun to create pressures on the balance of payments. All in all, a major turnaround in the downward trend of economic activities is unlikely to occur in 2010.