“My concern in Africa is that the real sector will start to hurt, and it hasn’t yet felt all of the impact of the crisis,” said Saleem Karimjee, southern
So far, last year’s global financial turmoil has hit
Its banks and companies have also found it harder and more expensive to access international credit, Reuters adds.
However, as the crisis evolves into a wider recession, affecting the spending habits of consumers in Europe and the
“It’s hard to predict — how will the average family in the
“Will they stop buying roses every week and buy them only two weeks, and how will that affect the cut-flower industry in
There are, however, plenty of signs of the pinch starting.
Besides thousands of layoffs at mines in Zambia, Congo and South Africa, the latter’s manufacturing sector, which includes BMW or Mercedes luxury cars for export, has gone into reverse, shrinking by 11.7 percent in March compared to 2008.
Wealthy Europeans and Americans are also cutting back on pricey holidays to the continent’s beach resorts and safari parks.
Tourist arrivals to the Indian ocean island of Mauritius fell 13.8 percent in February year-on-year, and in Uganda officials predict a 20-30 percent decline in an industry that rivals coffee as the country’s biggest foreign currency earner.
Before the economic crisis struck,
In March, as the first waves of world recession were washing up on African shores, the International Monetary Fund forecast continent-wide growth of roughly 3 percent — about half that of the previous five years — but said at the time that that might be “too optimistic”.
However, despite the occasional but inevitable failure in manufacturing and other industries, there was little risk of a domino-effect ripple through its still relatively unsophisticated banking system, Karimjee said.
“I don’t think the banks are exposed to the extent that the few failures you will see in the real sector will cause them to crash,” he said.
“You might have one or two that get into trouble, and you might have one or two acquisitions or bailouts as a result, but it’s not going to be anything like as widespread as you’ve seen elsewhere,” he said.