Financial Crises and Growth Prospects of African Economies

Abstract

This work takes a cursory look at different aspects of African economies and their potentials for growth within the context of financial crisis. Financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value due to lot of factors. The history of financial crisis in the world could be traced back to sovereign defaults which were the form of crisis prior to the 18th century. However, the bursting of the South Sea Bubble and the Mississipi Bubble in 1720 is regarded as the first modern financial crises. Other crises have followed culminating in the recent global financial crisis which was as a result of the bursting of the housing bubble in the United States in August, 2007. The crisis caused a serious setback for Africa because it took place at a time when the region was making some progress in economic performance and management. Most, if not all the economies in Africa are faced with several problems: underdeveloped agricultural and manufacturing sectors, policy somersault, monoculture, inadequate infrastructures, corruption and the like, among others. This work suggests possible solutions (including alternatives to existing paradigms) on how African countries could navigate through various aspects of financial crisis. Keywords: Financial Crises, Growth Prospects, African Economie