The main impact of the global financial crisis on the DRC economy is the slowdown in overall economic growth, which is projected to be 6 percent in 2009. With the crisis going on, the situation is likely to deteriorate. Two of the major sectors expected to drive DRC growth in 2009, i.e. infrastructure and mostly mining, have already been severely affected by the crisis.
Public Sector and Governance
The negative impact of the financial crisis on economic growth in Madagascar is expected to be relatively limited; growth is still likely to attain 7% in 2008. Over the medium term, declining demand in industrial countries is expected to affect strategic export oriented sectors such as mining, tourism, textiles and agribusiness. The depth of the banking sector in Madagascar is still very modest with deposits accounting for less than 9 percent of GDP.
Uganda has in the past few years showed impressive growth rates despite a number of shocks including prolonged drought, severe energy shortage and the adverse impact of high oil and food prices. Public finances are in good shape with a very favorable debt situation and the financial sector is sound and well-capitalized. Uganda is, therefore, entering the global economic slowdown in a relatively strong position.
When the storm hit, South Africa had been sitting on relatively strong fundamentals and emerging from a protracted period of economic expansion. The meltdown allowed “not-so-well-hidden” vulnerabilities to surface. Unemployment, inequality, poverty, crime, and HIV/AIDS still continue to plague the country. Agriculture, mining and manufacturing declined while the trade and current account deficit (CAD) widened.
The impact of the current global crisis on Angola’s economy can be divided into three parts. First, a marginal impact on the financial sector: no stock exchange, very small inter-banking credit markets, limited transaction flows with international markets (except via Portuguese Bank), low level of banking services, low ratio of loans to deposits, etc. Nonetheless, there was a decline of around 20% in demand deposits in foreign currency in November.
Lorsque l'on parle du secteur de la microfinance au Niger, on entend souvent les termes de restructuration et de réforme, comme si la faible pénétration du crédit dans les zones rurales était forcément due à des institutions financières à restructurer et à réformer.
“When I was a boy of fourteen,” Mark Twain once said, “my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished by how much he'd learned in seven years.”
In the midst of the very serious resumption of violence in Democratic Republic of Congo, an interesting debate has broken out between Paul Collier and Adekeye Adebajo on the question of who should deliver basic services in post-conflict societies. Paul suggests these services be provided by non-state actors, such as NGOs and church groups. Dr.
I gave the Jerome A.Chazen lecture at Columbia Business School the other day. The gist of my talk was that:
The conventional wisdom that African financial systems have little to worry about in the wake of the global financial crisis needs to be challenged. In the attached note, I raise five* concerns: