This is according to economist Joseph Stiglitz, who spoke in Tunisia yesterday, 11 January 2010, on the implications of the financial crisis for Africa. He was hosted in Tunis by the African Development Bank.
But he also emphasised the role of savings — an area of weakness for SA — in achieving economic stability.
The recession “is likely to continue in 2010, and many think it will continue through 2011 and 2012”, he said.
Development aid could suffer as a result of the debt burden carried by the US, which had a large structural deficit going into the recession and had slashed taxes. This meant 5% of US gross domestic product could go to servicing debt — or between a quarter and a third of government revenue.
Stiglitz said rising wages in Asia might shift manufacturing jobs to Africa. But this depended on a more comprehensive development strategy in Africa that would include technology, human capital and innovation.
Growth rates of 7% a year had been recorded in Africa before the financial crisis, leading to hope that the stagnation and low growth of previous years could be reversed, he said. But because of the crisis, per capita growth in Africa “may have actually fallen”.
Source: Business Day
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