Journal of Sustainable Development in Africa (Volume 11, No.3,.pdfVIP

Journal of Sustainable Development in Africa (Volume 11, No.3, 2009) ISSN: 1520-5509 Clarion University of Pennsylvania, Clarion, Pennsylvania GLOBAL ECONOMIC MELTDOWN AND SUB- SAHARAN AFRICA: TRANSMISSION CHANNELS, LESSONS AND POLICY OPTIONS By: Dipo T. Busari and M. Adetunji Babatunde ABSTRACT The global events since 2008 seems to suggest that generating the required foreign exchange for sustained growth in sub-Saharan Africa (SSA), which is important for meeting the MDGs, will be a mirage. These events include economic slowdown in major advanced countries, financial crisis in major global financial markets and institutions, and general global credit squeeze. A direct consequence of these events is the drastic fall in international prices of major primary commodities that are fuelling growth in Africa. This implies that many SSA countries might witness drastic swings from fiscal and external current account surpluses to prolong deficits, restricted access to international (trade) credit and massive reduction in foreign direct investment (FDI) inflows among other issues. Consequently, we examine the expected channels through which the global financial and economic crisis can impact on Africa economies, what lessons are (and can be) learnt and considers possible emergency/short-run policy response as well as desirable regulatory proposals and long-term responses which should be designed and implemented to ameliorate the impact of the crises and possibly insulate the sub-continent from future crises. The conclusion is that there is a strong need for a change in development strategies in SSA. Keywords: Global Financial and Ec