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Policy Brief on the Financial Crisis - The Financial Crisis and Decades of Reforms-Options for Africa's Future
Improved policies, institutions and political leadership in Africa over the past decades have played a critical role in helping the continent achieve stronger macroeconomic fundamentals. The reform dividends have resulted in better economic performance as reflected in higher economic growth, fiscal surpluses, lower and more stable inflation, low and declining external debt burden. These gains, achieved through painful reforms, are threatened by the current economic crisis. In particular, the crisis is causing a deterioration of macroeconomic balances in most African countries. For example, Africa’s growth is expected to slow down to 2.8% in 2009, down from 5.7% in 2008 and 6.1% in 2007. From an overall current account surplus position of 3.5% of GDP in 2008, the continent will face a deficit of 3.8% of GDP in 2009. The budget deficit is foreFDVW at about 5.5% of GDP in 2009.