As the Eurozone slips into Recession what are the implications for Africa
As the Eurozone goes into Recession, should other regions of the world be alarmed or concerned? Truth is the world economy is a system and in this system there are a lot of political issues in the economy. One such issue is that once there is a shock or imbalance in terms of volumes of growth and trade, there arises a ripple effect. This ripple effect like a wave affects everyone that is connected. So yes Africa should be concerned that the Eurozone has gone into Recession, even though we are withnesing growth rate of 6% anually for the continent.
Another good reason Africa should be concerned is the fact that there won’t be funds available for aid and less of that also for foreign direct investment. This is because the Eurozone will be austere in it’s finances in trying to revive and awaken it’s economy that has now gone into double quarters in terms of growth.
Well this can also be a blessing in disguise, as we Africans will look inwardly especially to ensure we get the funds we need for our development. The African development bank is there, there are also other partner banks such as the development bank of the world. Another option is the China export-import bank EXIM, even though recently it has tightened it’s purse. The UK is also an option. Japan is also an option and so are the members of the BRICS countries.
Ultimately, in this globalised world, there is a need for creating collective security economically via the world trade organisation. Comparative advantage is good, but sometimes needs to be put aside. This is simply because of the logic that some regions can do away with some things they manufacture as regards to others.
Europe and Africa can trade places (that is if possible). Manufacturing and industrialization need to be moved to Africa as a large market for such goods. Just as well, the resources needed to make most of the goods such as steel, timber and other tech goods such as aluminium for semi conductors are found in Africa in abundance. Africa stands to gain massively in terms of GDP and also it’s aspirations to become part of the G20.l can come true.
On the final note, no body needs to laugh at anybody’s misfortune and that includes Africans with their European partners. Historical anticedents may warrant such, but no it shouldn’t. Rather the continent of the black people of Earth needs to rise up to it’s potential and be counted. Alas, the Eurozones problem can be our opportunity like it usually is for them as well!!
