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Policy Brief on the Financial Crisis - Containing the Impact of the Global Crisis and Paving the Way to Strong Recovery in Africa
Africa was an innocent victim of the global crisis, which disrupted a period of the continent’s highest growth in decades and presented a severe setback to poverty reduction progress. Due to prudent macroeconomic policies and reforms, Africa entered the global crisis on stronger footing then the past recessions, with some countries being able to implement stimulus packages. However, many low income and especially fragile and post-conflict countries were not in the position to adopt counter-cyclical measures when the crisis hit.
While the global economy shows signs of recovery, the outlook for Africa is uncertain. It also remains to be seen whether the current recovery is sustainable or driven mostly by stimulus packages and thus may falter in the event of premature or disorderly exits. Reversal of global recovery would have damaging effects on Africa. With concerns that Africa’s recovery will be delayed and/or the longer term growth lowered, the key policy question is how to bring the continent quickly to a high and sustainable growth path. It is in this context that the debate on Africa’s medium term growth prospects and associated supportive policies must be considered.