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Africa and the Global Economic Crisis: A Risk Assessment and Action Guide
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1028-3625
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EUI RSCAS; 2010/27; European Report on Development
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NAUDÉ, Wim, Africa and the Global Economic Crisis: A Risk Assessment and Action Guide, EUI RSCAS, 2010/27, European Report on Development - https://hdl.handle.net/1814/13694
Abstract
It is increasingly apparent that, despite earlier hopes, the global economic crisis will have a significant
impact on the economies of Sub-Saharan Africa. In order to co-ordinate and craft the most appropriate
responses for African economies to withstand and recover from the crisis, it is necessary to identify
the degree to which the continent, as well as the individual African countries, is at risk of being
negatively impacted. This depends on both vulnerability to trade and financial shocks, as well as the
resilience of countries to cope with these shocks. Accordingly, vulnerability and resilience indices are
constructed for the continent and individual countries. It is shown that, of all developing regions,
Africa is the most at risk from the crisis: it has higher vulnerability to trade and financial shocks, and it
has the least resilience of all regions. Based upon a vulnerability-resilience matrix, the African
countries most at risk are the Democratic Republic of the Congo, Burundi, Côte D’Ivoire, Liberia,
Angola, the Sudan, Chad, Guinea-Bissau, Guinea, Zimbabwe, Somalia, Kenya, Mali, Nigeria, Ghana,
Cape Verde and Mauritania. With a few notable exceptions, such as Kenya and Ghana, these are all
‘fragile states’. Based upon the distinction between vulnerability and resilience, an action guide is
proposed. This makes a distinction between short-term and longer-term actions, in particular be-tween
actions aimed at mitigating the impact of the external shocks, assisting countries to cope, and actions
aimed at reducing risk.