The ongoing global financial crisis will dent Africa, cutting aid and economic activity on a continent dependent on resource exports and tourism.
This was the view expressed by experts at a one-day conference held in Kampala, Uganda last week where falling commodity prices as well as a looming slump in tourism was discussed.
Brenthurst Foundation director Greg Mills says for African countries that export commodities “that`s bad news but for African countries that import oil, that import food, that`s, of course, better news.”
The financial crisis that has diverted staggering amounts of money from government coffers into the banking system will also affect Africa, Mills says. “It`s likely to have, I think I downward effect on aid flows to Africa. Previous financial crises – notably that in Asia – very much did that.”
German news agency DPA reports that European Union special representative to the African Union Koen Vervaeke, said Europe wanted to increase aid to Africa, “but has not yet decided how to target its funding”.
The EU and its member states annually give 26 billion euros in development aid to Africa.
Mills added that “it is going to be difficult to continue generosity for others when there are problems at home. Every African state worth its salt must have Plan B to handle the crisis.”
Meeting participants recommended African governments stamp out corruption, develop stronger infrastructure, strengthen their private sectors, bolster agricultural output and remain cognizant of international economic developments if they hope to weather the crisis.
Vervaeke added that the crisis also provided an opportunity for the AU and EU to collaborate on reopening talks on the structure of the international financial sector and the global financial architecture.