African countries have in the past missed out on growth opportunities through lack of integration in the world economy.
According to this article from BBC News however, this fact could help most of Africa to weather the current economic storm.
African banks have not invested in the financial products which have caused so many problems for the rest of the world and so are looking quite strong at the moment.
However many African economies are dependent on selling commodities internationally and so of course they will suffer if demand in the rest of the world goes down. African countries have also been heavily affected by rising food and fuel costs.
In the end, says the BBC article, one major contribution to future growth of African countries will be foreign investment in projects. Whilst foreign investment will certainly be affected by economic conditions in the rest of the world, a very important factor is political and economic risk within each country. With African countries perceived to be among the most corrupt in the world, hope for the future depends on improvement.
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A comment for “African economies and the credit crisis”
All the writing on the wall looks like Africa will be hit hard by the crisis. If not directly, it will indirectly with a decrease in aid, and China’s discontinuing of resource development to focus on domestic stabilization. My heart goes out to all those affected by such a disaster, its going to be a tough period for all I think.