The African Business Review May-Jun 2014 | Page 19

market prices increased to US $1,232.6 billion in 2007 from US$
1,083.51billion in the previous year. This figure later dropped to
US$ US$1,034.2 billion in the first quarter of year 2009 (CBN,
2009). The IMF (2009) added that, for some emerging economies,
the GDP at current market prices in 2007 stood at US$273 billion
(for South Africa), US$124 billion (for Nigeria) and US$30.0
and US$129 billion for Kenya and Egypt, respectively.

On the whole, the Africa’s rate of growth of inflation ranged
between 7.0 and 10.3 % between year 2000 and 2007 while the
rate of growth of money supply was between 17.5 and 26%. In

There is a concern over the capital inflow into
the African economy and limited availability
of trade financing arising from global credit
crunch. The more the African countries
appreciate the magnitude and implications
of the present economic realities, the more
they need to look for the necessary solutions.
the same vein, the contribution of net foreign balance to GDP
growth (1990-1999) averaged 0.2 while it sharply dropped to
-2.3 and -2.8 in 2007 and first quarter of 2009 respectively.

For the same period, the contribution of exports of goods
and services averaged 1.5% between 1990-1999 rose to 2.6%
in 2007 and then dropped to 2.4% in the first quarter of 2009.
Between 2000 and 2007, the average consumer price inflation
(%) for Nigeria, South Africa, Kenya, Egypt and Ghana stood
at 12.7,6.2,9.2,6.0, and 18.7, respectively. The situation became
worse between 2008 and the first half of 2009 due to the global
financial crisis.

The exchange rate indices such as the nominal exchange
rate and real exchange rate indicated a general decline in the
strength of the local currencies. This development has a negative
implication on the purchasing powers of many Africans and
indeed those of their entire households. To avoid an unmanageable
global economic recession therefore, it is important that
more attention be paid on the efficiency of resource use and
minimization of leakages or wastages.

Externalities of global financial crisis and African
economies

Towards the end of the year 2008, there were insinuations by
key policy makers in African countries to the effect that the
rampaging global financial crisis would not affect African
continent. They were however proven wrong within the first
quarter of year (2009) when many Africans working in many
of the developed countries such as the United States, Canada,
Britain and Germany started losing their jobs in thousands. This
negatively affected their remittance to home countries. Indeed,
there is a growing pressure on these workers to return home due
to the crisis in the employment markets in their host countries
overseas. In addition to this, Nigeria, Ghana, South Africa and
Kenya, among others, had by April 2009, experienced sharp drop
in stock exchange, market capitalization, reduced budgetary
revenues, falling external reserves and general m