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Africa reforms matter

July 21, 2009

African governments have been hit hard by a withdrawal of investor money from the continent and need to make sure they remember reforms and avoid high inflation in their attempts to protect their economies, says Razia Khan, head of Africa research at Standard Chartered Bank in London.

Africa gets 3 percent of the world’s cross-border flows, but BIS end-2008 data shows the region suffered the world’s largest decline in cross-border financing due to the global financial crisis, Khan told a breakfast audience of politicians, bankers, investors and journalists in London today.

Africa needs the economic environment that will lure investors back in, she says.

“Financial markets in Africa have not shown signs yet of a significant recovery. “Maybe there is going to be some longer-term support for commodity prices, but governments have to guard against a deterioration of the fundamentals that have been in place to support growth,” she says.

Across sub-Saharan Africa, South Africa will withstand the global recession better than other countries, she adds.

“African growth is still likely to be positive, but macro-economic stability is more of a risk in some countries than in others.”

Comments

African countries have so much to do economically and politically to restore investor confidence. I hate to say it but is it possible that many African countries have tipped beyond the point of no return! Corruption and bad governance are now so deeply enshrined in the African psych and way of doing things that it is hopeless to expect change?

Posted by Wilbert Mukori | Report as abusive
 

3 key issues must be sorted out first; –politics [we need to focus on economic & social challenges, not power plays], Communication [develop a strong gameplan, and get a decisive majority to buy into it], and Execution [the devil, as always, is in the detail].Kenya has this challenge. Anyone with a basic understanding of economics has known for years that we’re staring at a food, energy and water crises for years. Only now, in 2009, has the government delivered a briefing on how nasty the situation is. It will get worse, but the focus is not on bracing for hard times and implementing long-term solutions. If anything, there are no long-term solutions on the table from Government.East Africa’s biggest economy is merely symptomatic of this kind of problem. Unless we sort this out; — we’re going nowhere prety fast.

Posted by Ramah Nyang | Report as abusive
 

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