Effects of and responses to the financial crisis in Sub-Saharan Africa

Against the backdrop of the financial crisis this project examines the effects of the crisis in different countries of Sub-Saharan Africa. Furthermore possible actions of donors in order to overcome the crisis as well as the question whether the role of the donors has changed under these circumstances, are analysed.

Project Lead:
Kathrin Berensmann

Time frame:
2009 - 2011 / completed

Project description

Research Question:

Even though Sub-Saharan Africa (SSA) is compared to other regions not deeply integrated into the international financial markets, the financial crisis had negative impacts on this region. The decline of global growth and commodity prices has deteriorated the economic outlook in SSA. However, compared to previous global economic crises, most of the countries in this region got away relatively lightly and recovered reasonably quickly. In Sub-Saharan Africa this was essentially due to sound macro- and micro-economic policies adopted in previous years. Their relatively comfortable budget situation prior to the crisis gave many countries in Sub-Saharan Africa room for anti-cyclical fiscal policy to counter the drop in domestic and foreign demand.
This project covered the following aspects:

  • What are the consequences of the financial crisis on SSA?
  • Are the countries in SSA affected differently? Is it possible to distinguish between various groups of countries?
  • What are the policy responses taken by the bilateral and multilateral donors to overcome the financial crisis? Has the roles of donors changed in the course of the financial crisis?
  • What are the policy responses of the countries in SSA to cope with the financial crisis?