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by Mr. Normand Lauzon, SWAC Director
The financial tsunami that has shaken the foundations of the global economy since the month of September eclipsed all other subjects of concern in the media of developed countries. Finally, the news of a new American President provided the media with other fodder. But did not the prospects for a recession and the need to “clean up” financial capitalism help Barack Obama win?
In Africa, many people cannot understand how billions of dollars can be raised in a few short weeks to save banks while continuing to explain that it is difficult to find an increase of a few billion dollars for development aid?
Of course, things are not that simple, but the countries of the North should not ignore the psychological impact of the greatest mobilisation of funds in the history of mankind. More concretely, what will be the economic impact in West Africa of the financial crisis and the recession announced in Europe and North America?
On this subject, Lionel Zinsou, eminent West African banker, provides an analysis. He stresses that the region cannot be totally immune to this crisis. West Africa is partaking in globalisation for better and for worse. A serious crisis and external mishaps shall unfortunately slow down West Africa’s dynamic growth in 2009 and even perhaps in 2010. The cruel “rule” is then that the more an economy is dynamic, the more it will be affected by external factors.
The Franc zone countries should be less affected than Nigeria or Ghana because their banking system is based on hard currency and linked less to the large Anglo-Saxon banks. Of course, but aren’t the Nigerian and Ghanaian economies closely linked to their Francophone neighbours? There still needs to be a regional analysis of the crisis’ impacts.
Does one crisis overshadow another? While some weeks ago, with the worldwide inflation of food prices the worst was feared, then international prices plummeted. The global and West African cereal harvest has been exceptional in 2008. In addition to this is the failure of hedge funds that depended greatly on this commodity. We should thus have a respite in 2009 from the sharp price hikes. For all that, there is still the problem of the regional regulation of the market. How can a sharp drop in producers’ revenues be avoided?
I encourage you to become familiar with the other SWAC activities. The next meeting of our Strategy and Policy Group (4 and 5 December) will be an opportunity to draw up a global assessment of our action in support of West Africa.
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