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It has been estimated that African countries need annual economic growth of around 7 per cent in order to halve the number of people living on less than one dollar a day. As a result of the global economic crisis, however, the average growth prognosis for Africa in 2009 is projected to be just 1.7 per cent. Many African countries, in fact, will see substantial contraction of growth this year. The causes are falling export demand and tourism receipts, declining commodity prices, reductions in the availability of credit and trade finance, and less inflows of remittances, private portfolio flows and foreign direct investment.

Recovery will require appropriate and timely short-term mitigation and coping measures that are consistent with the long-term imperative of strengthening country resilience through the diversification of economies, improvement of governance (including the environment for doing business), and reform of the global financial and aid architecture.

UNU-WIDER Discussion Paper No. 2009/03, “The Global Economic Crisis: Towards Syndrome-Free Recovery for Africa”, by Augustin Fosu and Wim Naudé , outlines the impact of the global economic crisis on Africa. It covers the coordinated and consistent recovery efforts that will be required to assist individual countries in mitigating the risk and coping with the impact in the short term, and reducing risk over the longer term.

The authors note that care must be exercised to maintain and improve good governance, which is essential for African countries to avoid introducing various “anti-growth policy syndromes” into their economies. Such syndromes could arise, the authors warn, if responses to the crisis result in (i) further boom-bust cycles and a return to the historically high volatility of African growth, including inflation, (ii) another debt crisis, (iii) households engaging in adverse coping strategies with lasting impacts, (iv) reversal of gains made in opening up African economies and re-introducing crippling state controls, and (v) entrenchment of inequities and inefficiencies in the global financial and aid architecture.

The authors conclude that Africa can — and will — recover, and call for a “syndrome-free” recovery, which is improvement that does not contain seeds of its own destruction.