The United Nations has warned that the global fin ancial turmoil has sparked a crisis in the global trading arena, whose impact wo u ld affect the growth of African economies which have for a long time depended on export-led growth.
The United Nations Economic Commission for Africa (UNECA) announced Thursday in its World Economic Prospects 2009 that African economies would feel the severe e f fects of the sliding global trade prospects and the falling cost of oil prices.
The growth on the world trade is expected to slow down this year to just 2.1 per cent compared to the 4.4 per cent it recorded in 2008, severely affecting most A frican economies, whose economic growth was shaped by global trade.
“It would be very difficult for the African economies to continue to finance the ir development programmes with the reduction in the global trade,” said Stephen K aringi, UNECA’s Chief, Trade and International Negotiations Section.
Africa’s growing economic muscle is expected to diminish substantially this year as a result of the global financial turmoil. The global financial crisis has ma d e it impossible for most states to access external funding for their own nationa l development.
The financial crisis, which the UN says is the worst since the 1930s, could deep en further, sinking most states in Africa, who rely on the export of agricultura l commodities to boost their economic growth and feed their populations.
African states, for lack of policy manipulation space, cannot work out a joint p lan to free the continents of the financial crisis, unlike the West, which have u sed technical approaches to save their banking industries from the risks of fail u re.
The UN economic experts suggest that a global financial “stimulus package” shoul d urgently be designed to help Africa also to cope with the financial and econom i c crisis that will emerge from the faltering global trade returns.
“African states have not been able to offer economic stimulus packages, they can not do this by raising the level of risks but they will have to consider an econ o mic stimulus package by increasing their spending,” said Karingi.
According to the expert, East African region emerged as Africa’s fastest growing economic zone as a result of better economic policies and increased spending on infrastructure, which has benefited most economic sectors.
This year, the UN experts predict, most African states would face restrictions a ccessing sources of external funding, while money remitted from the Africans liv i ng in the western nations is also expected to decline massively.
The experts say the financial crisis has approached at the wrong time for Africa , which was focusing on the 2015 deadline of combating absolute poverty.