Global economic crisis and Africa’s economic performance

Abstract

It is generally acknowledged that African economies were able to withstand the 2007/2008 global economic crisis because of better macroeconomic management. Macroeconomic fundamentals, such as growth, rate of inflation and deficit/GDP ratio, among others, appear to move in the right direction during and after the crisis. In recent times, Africa’s growth of about six per cent is being celebrated, despite the rising rate of unemployment, rising incidence of poverty, widening inequality and deterioration in the provision of basic needs. Both the economic performance and misery indices seem to be rising despite ‘impressive’ growth trajectories. The positive growth is backed by rising commodity prices with the inherent adverse implications. Regression results indicate that democracy, fiscal balance and life expectancy are positively related to growth. On the other hand, the rate of inflation and human development index show a negative relationship with growth.