1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Africa in crisis

June 9, 2009

The World Economic Forum opened in South Africa on Wednesday with a host of business and political leaders trying to assess Africa's challenges and opportunities.

Children playing outside huts
This impoverished shanty town area of Cape Town is indicative of the economic problems facing AfricaImage: AP

Just a year ago at the same gathering African leaders were upbeat about their economies with the continent enjoying a prolonged period of strong growth of up to five percent over the past five years.

All that appears to have been snuffed out almost overnight and has left the continent reeling in the wake of the global economic crisis.

Dr. Dirk Kohnert, a researcher with the German Institute for Global and Area Studies (GIGA) in Hamburg, told Deutsche Welle that it's a recurring theme: "It's always the same. The poor are affected foremost. And most of the poor countries worldwide are in sub-Saharan Africa. In addition to the 400 million poor there, there will be 27 million new poor at the end of this year."

Never before in post-colonial history, has Africa's future looked so grim, says Kohnert: "In December last year the International Monetary Fund expected 7 percent economic growth for Africa. That has been revised in the meantime to 2.3 percent, which probably is still too optimistic."

Aid too will suffer as it is related to the donor countries' gross domestic product, or GDP. Kohnert says that EU countries at the G8 summit in Gleneagles in 2005 pledged to finance aid up to 0.58 percent of GDP. However those good intentions have been wiped out due to the recession in Europe which means there will be $4.6 billion less available in aid than last year.

In a press release Katherine Tweedie, who is Head of Africa at the World Economic Forum, expressed optimism that the participants will learn from the meeting in Cape Town: "I am encouraged to see that over 800 leaders have chosen the 19th World Economic Forum on Africa as the key platform to address the implications of the global economic crisis for the continent. Most importantly, the meeting will facilitate interaction and dialogue."

Chinese ambitions

A billboard showing two people shaking hands
China hopes to increase its cooperation with Africa in the wake of the financial crisisImage: picture-alliance/ dpa

In the past decade China has become an increasingly important player in Africa. It has its own aid programme, but that's not Bejing's priority, says GIGA's Dirk Kohnert: "The business aspect is really the focus of Chinese-African relations. The export of Chinese goods to Africa increased tenfold in that period of time. In the meantime China is the second trade partner with Africa after Europe."

And he adds: "Some say it's a win-win situation, but it depends whom you consider. African governments will certainly be glad about this new competitor. Europe is suffering from this as far as traditional trade links with former colonies are affected."

While European countries see themselves as Africa's natural partners, due to their long established political and cultural links as former colonial powers, China has developed its own missionary ambitions on the continent and is undermining democratic values, says Kohnert: "There are some negative examples like Togo. China has over decades fostered autocratic rule in Togo or in Guinea-Bissau or in other countries."

A third way

Every crisis bears its challenges and opportunities and so does this one, says Kohnert: "IMF director Dominique Strauss-Kahn recently called Africa an innocent victim of the global financial tsunami. But in the long run it could be a gain, because there is another chance for African governments and African politicians to end western-style aid and cooperation. These times are different to the colonial times."

Some African economists even go a step further: they support the idea that the west should stop aid completely and that African governments should concentrate on becoming self-sufficient.

Author: Patrick Vanhulle

Editor: Rob Mudge