Never to be accused of over-optimism, the International Monetary Fund said today that the global economy is headed for a “Great Recession,” and that countries in Africa will suffer particularly from the downturn, according to Reuters. In a speech before African business and political figures in Dar Es Salaam, Tanzania, IMF Managing Director Dominque Strauss-Kahn warned that global growth would likely slow to “the worst performance in most of our lifetimes” in 2009.
Strauss-Kahn emphasized that “continued deleveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe,” pointing also to falling trade and commodity price numbers.
A major risk posed by the encroaching recession, said Strauss-Kahn, is that Africa, immune so far from the index-related losses of the recession, would nonetheless feel the pinch as the deteriorating global economic climate hit its markets. “Even though the crisis has been slow in reaching Africa’s shores, we all know it is coming and its impact will be severe,” said Strauss-Kahn. “We must ensure that the voices of the poor are heard.”
Economists worry that an economic slowdown in Africa will precipitate significant damages within the fragile continent. Though regional growth across the continent had been encouraging before the recession, the recession could have a poisonous effect on the stability—both economic and political—of many countries.
Said Strauss-Kahn, “This is not only about protecting economic growth and household incomes – it is also about containing the threat of civil unrest, perhaps even war. It is about people and their futures.”