The 2010 African Economic Outlook finds the continent reeling from the effects of the world’s deepest and most widespread recession in half a century. Many countries are at risk of falling far off track to achieving the Millennium Development Goal of halving extreme poverty and hunger by 2015. Just how hard was the
region hit? What are the prospects for recovery? Insights and answers in this edition including an in-depth
study of Taxation and Aid in Africa.
Global conditions are expected to improve in 2010
Since the trough of the recession in the first half of 2009, the global recovery has made significant progress. Global output is on the rise and business sentiment is improving world wide. But towards the end of 2009 global industrial production and world trade levels were still much lower than before the crisis.
An exception is the development in emerging countries where – boosted by China – industrial production already exceeds pre-crisis levels.
A number of constraining factors continue to weigh on the global recovery. In many countries private consumption is constrained by household indebtedness, high unemployment, weak income growth and the withdrawal of fiscal stimuli. Investment activity is dampened by the high degree of unused capacity and also by credit constraints as banks consolidate their balance sheets.
Trade Policies and Regional Integration in Africa
In recent years, before the global crisis, international trade has increased exponentially. While African countries also benefited from this increase, their share in world trade has remained low; Africa’s export trade amounts to only about 3% of world exports.
This poor trade performance partly relates to trade protection outside Africa against African products, but it also stems from constraints that inhibit trade within Africa. With the expectation of a generally moderate recovery of the global economy and of world trade as discussed in Chapter 1, it is even more important than before to foster African countries’ trade with economies both outside and inside Africa. A rapid conclusion of the Doha Round and resolution of the outstanding issues in the Economic Partnership Agreements (EPAs) negotiations are crucial to Africa’s medium-term prospects in both regional and international trade.
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Challenges Africa faces after the global crisis
