I came across two good articles while doing some research on how the current global financial crisis is affecting (or expected to affect) Africa. The first is from the International Herald Tribune (“FDI Collapse Hits African Growth“).

Key points:

• Institute of International Finance (DC) projected in January that net private sector capital flows to emerging markets will fall to about $165B in 2009, compared to $466B in 2008.
• Commercial banks expected to make net withdrawal of about $61B from emerging markets in 2009
• Concern over supply of credit to emerging markets
• Both IMF and World Bank have scaled back expected economic growth numbers for Africa in half to 3.25% and 3.5% respectively.
• “The first victim of the slowdown will be investment in the infrastructure upon which future growth will depend”

On a lighter note, Uganda seems to be defying the odds (mostly due to the discovery of oil in the West, but also very good economic policies). The IMF projects economic growth between 7-8% over the next four years. Economic policies that helped Uganda weather the financial storm include:

• Low public debt
• Comfortable level of international reserves
• Relatively sound banking sector

If you are an econ nerd like me, you should take a look at the article — it’s very well written.