African economy

OpinionPolitics & Policy

What’s driving Africa’s youth-led protests?

While many of the protesters' demands are unlikely to be met, the demonstrations underline the urgent need for fundamental reform, not just in Kenya or Nigeria, but across Africa
Two men hold placards at a demonstration in Washington D.C. in June 2024. They were part of a demonstration by Kenyans living in the United States in solidarity with mass protests then taking place back home.
OpinionPolitics & Policy

China benefits most from its relations with Africa: where’s the imbalance?

The eight Focac summits since 2000 have not resulted in mutual gain, particularly in trade and industrialisation for Africa, with China reaping most of the benefits
Chinese President Xi Jinping inspects a guard of honour during a state visit to South Africa in July 2024.
EconomyHealth

Fitch warns mpox outbreak could dent regional economies

An escalation of the mpox outbreak in sub-Saharan Africa could lead to a slowdown in economic activity and financial distress for governments of the affected countries
Various currency notes of African countries are seen in this photo
EconomyEnvironmentPolitics & PolicyProperty

Raising revenue from land: what African cities can learn from Hong Kong’s unique leasehold system

Often cited as a prime example of effective land value, Hong Kong uses a variety of land-based financing models that have proven effective in funding key public projects
Final approach to Hong Kong with views of Victoria Harbour and Stonecutters Bridge in the early morning, July 2016
EconomyPolitics & Policy

The IMF is failing countries like Kenya: why, and what can be done to stop it

IMF’s declining resources relative to the size of the global economy has meant less funding than members need, forcing austerity and weakening its bargaining position in crises
Street art in Dublin against IMF/EU debt, June 2013. The recent Kenyan anti-tax protests are a warning that the International Monetary Fund (IMF) is failing. The public does not think it is helping its member countries manage their economic and financial problems, which are being exacerbated by a rapidly changing global political economy. The IMF has provided financial assistance to Kenya; however, the funding comes with strict conditions that suggest debt obligations are more important than the needs of long-suffering citizens. This is despite the IMF's claim that its mandate now includes helping states deal with issues such as climate, digitalisation, gender, governance, and inequality. Unfortunately, Kenya is not an isolated case. Twenty-one African countries are receiving IMF support. In Africa, debt service, on average, exceeds the combined amounts governments are spending on health, education, climate and social services. The tough conditions attached to IMF financing have led the citizens of Kenya and other African countries to conclude that a too powerful IMF is the cause of their problems. However, research into the law, politics and history of the international financial institutions suggests the opposite: the real problem is the IMF’s decline in authority and efficacy.
EconomyOpinion

The liquidity crisis in developing countries is not over

External debt ratios of low-income and lower-middle-income countries are lower than before, but liquidity pressures have increased due to various shifts in the global economy
Globe weighed down by a chain and labelled 'debt': global debt crisis, economic burden, financial instability, liquidity crisis
EconomyPolitics & Policy

Africa’s debt crisis demands a bold new approach

Africa cannot rely on the global community to provide adequate funding or debt relief to address its development needs and crises, such as pandemics or extreme weather events
South African President Cyril Ramaphosa and other G20 leaders at the opening ceremony of the 2023 G20 Leaders' Summit in New Delhi, India, on 9 September 2023. The G20 agreed a Common Framework that was supposed to help resolve the sovereign debt crises in low income countries. Four African countries applied to have their debts restructured through the framework. Despite years of negotiations, it has failed to fully resolve the debt crisis in three of them.
EconomyOpinionTrade

African countries need to shift from exporting commodities to tapping domestic demand

Recent internal instability and external shocks have created a vicious cycle of economic and financial distress in Africa, raising questions about the continent's ability to shape its own destiny
A panoramic photo shows the rapidly growing sustainable energy network constructed by the U.S. Army Corps of Engineers, Sacramento District at Toole Army Depot, Utah, March 22, 2016. When the two turbines, solar array, backup generators, battery storage systems, a micro grid and other planned renewable sources are operational, Tooele expects to become net zero by 2020 – going off grid and producing all of its own energy needs.
EconomyOpinion

Africa needs a grand revival plan from the West and China

Africa's crises have fuelled a surge in migration to Europe unlikely to abate soon unless rapid population growth is matched by improving economic conditions
An overcrowded refugee boat capsizes in the Mediterranean Sea. The current economic and political situation in Africa has already fuelled a sharp rise in migration. Last September (2023), the UN High Commissioner for Refugees reported that more than 2,500 people had died or gone missing while trying to cross the Mediterranean to Europe in the first nine months of 2023, with many more perishing before they reached the coast. During that same period, 130,000 migrants, many departing from Tunisia or Libya, landed in Italy. These numbers will increase sharply if Africa’s population growth is not coupled with improving economic conditions. Worryingly, the International Monetary Fund’s current forecasts suggest GDP growth of around 4 per cent in Sub-Saharan Africa for the next two years – well below long-term trends. The current influx of mass migration to European countries such as Italy, Spain, and Greece may be only the beginning.
EconomyOpinion

Fixes for Africa’s exploding debt and collapsing currencies

Highly indebted African countries face stark trade-offs between servicing expensive debt, supporting growing development needs, and stabilising domestic currencies
Storm clouds gathering over Accra, Ghana. Nineteen African countries, including Ghana and Zambia, are already in debt distress (meaning they are unable to meet financial obligations) or at high risk of debt distress. Ghana’s public debt has more than doubled since 2012 and amounts to 85 per cent of GDP. Zambia’s went up much higher and stood at 98 per cent as of 2022. Both Ghana and Zambia, along with Ethiopia, have defaulted on their foreign debt, sparking fears about a broader sovereign debt crisis on the continent if more countries fall into debt distress.
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