Africa not immune to global economic crisis

James Makau

February 10, 2009: The International Monetary Fund (IMF) has removed doubts on Africa’s exposure to the raging global economic crisis, in a confirmation that will now test the foundations of the continent’s emerging economies.

Predicting slower growth for African economies in 2009, the multilateral lender last week sent warning signals that progress made over the past decade was likely to be reversed as key revenue streams for a huge number of Sub-Saharan countries slow down.

Mr Takatoshi Kato’s statements, delivered during last week’s African Union meeting in Addis Ababa, Ethiopia, are likely to worry Kenya’s monetary authorities already alarmed by the possible effects the global economic downturn will have on the country’s economy.

Like most Sub-Saharan countries, the backbone of the Kenyan economy remains commodity based, driven by agricultural exports primarily tea, coffee and horticulture products.

But with the competitiveness of Kenya’s main exports coming to the fore on lower prices and an expected slowdown in demand in key markets, the Central Bank of Kenya (CBK) may have to worry about the country’s worsening trade balance and exchange rate.

Source: www.bdafrica.com

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