Overview

And while Africa has by no means escaped the global economic downturn, the Organisation for Economic Co-operation and Development has still predicted growth at 2.8% for 2009, albeit against an original expectation of 5.7%.

Consolidation among financial institutions and increased regulation before the financial crisis hit, together with little, if any, exposure to sub-prime, has meant that many African banks and financial institutions have come out of the financial crisis in relatively good shape.

Where there have been issues local regulators have been quick to step in, for example, the recent rescue and restructuring of various banks by Nigeria’s central bank. While the downturn of the last two years has had an effect, whether through mines being put on care and maintenance programmes or reduced foreign remittances, the recent recovery in commodity prices has provided a welcome fillip. That being said, infrastructure issues, in particular power and transport, remain significant barriers to investment, as do concerns with corruption and the ability to successfully enforce contractual rights.

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