Africa’s Diaspora to the Rescue

Official statistics for 2009 are likely to show that migrants’ remittances fell sharply, as the global recession severely eroded job opportunities abroad. That makes it all the more important that African countries, many of which have paid a strong groundwork for sustainable growth, have a financial system in place that can leverage remittances effectively as the global economy recovers.

DAKAR – There is something dismally familiar about the tide of news reports concerning Africa’s increased suffering – more poverty, malnutrition, civil strife, and death – in the face of the recent global financial crisis. Almost everywhere, the media translates academic conclusions into graphic illustrations of brutality and despair in places such as Guinea and the Democratic Republic of Congo.

But there is another, woefully under-reported, side to the story. African countries that were locked out of international capital markets for most of the past five decades have largely been spared the twin woes of financial turmoil and economic downturn. The continent’s economies experienced a slowdown, but not a recession. Indeed, according to McKinsey & Company, Africa was the third-largest contributor to world economic growth in 2009, after China and India.

Moreover, several African countries have received ratings from credit agencies, which has opened up global financial centers to them. In some cases, these ratings have proved equivalent to or higher than those of countries such as Turkey or Argentina. Stock exchanges are being established across the continent.

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