The African Business Review May-Jun 2014 | Page 20

and there was a marked reduction of credit levels to private sector.
Rate of unemployment also increased further as government
spending on workers’ recruitment was cut down. In Ghana, as
pointed out in the World Bank Report (2009), the current global
financial crisis has brought about the fuel and food crisis. The
situation has again been exacerbated by the droughts and floods
in the Northern parts of the country. In South Africa, growth in
demand for credit by private sector slowed more than expected
to 14 per cent year-on-year in December 2008. The expansion
of demand for credit dropped from 15.3 percent in November
2008 to 9.5 percent in March 2009 (World Bank, 2009). There

African governments must address and ease
all forms of regulatory obstacles to business
such as barriers to entry, convoluted taxation,
property registration and licensing. Credible
insurance corporations should be capitalized
to be able to absorb financial shock in African
economies.
has also been a sharp decline in both consumer and producer
price inflation. The growth in credit aggregates has come off quite
sharply. This just supports the case for an aggressive rate cut.

Coping with externalities of global financial crisis
in Africa

The devastating effects of the global financial crisis cannot be
allowed to continue unabated. As a result, different stopgap
macro-economic measures have been put in place by African
countries in an attempt to at least cushion the effects of the crisis.
For example, the World Bank (2009) suggested that Nigeria,
whose economy is largely dependent on oil, should urgently device
other aggressive sources of government revenues. This suggestion
becomes necessary in view of the unprecedented decline in the
market price of crude oil to all-time low level of USD 38.5 per
barrel in March 2009. This situation fairly improved to USD
60.23 per barrel in July, 2009.

Again, the banking regulatory authorities, the Central
Bank of Nigeria (CBN) and the National Deposit Insurance
Corporation (NDIC) are mandated to urgently strengthen their
supervisory roles to guarantee banks’ transparency in whatever
assets they declare on their balance sheets.

Another device by the Nigerian government to protect the
economy from further hurt was the slashing of the salaries of
the public office holders. Under this dispensation, for exa \K