The economic crisis frequently affects Africa but it has recently mounted in several African countries including Ivory Coast, Ghana and Kenya. According to multiple sources including the BBC, several African countries including Ivory Coast and Ghana made bailout loan agreements with the International Monetary Fund to tackle their economic crises. While Ghana signed for $3bn, Ivory Coast signed an agreement for $3.5bn with the international money lender. Several other African nations including Gambia also took bailout support from the IMF in the last year. The bailout support will probably be helpful to tackle the economic crisis of the recipient countries but it remains unclear whether and how much bailout loans alone are the way out of economic crises in African countries.
It is pertinently notable that many African countries have been facing economic troubles in recent years. But global economic troubles and the Ukraine war increased the economic crisis in several African countries including Ghana — a leading exporter of cocoa beans worldwide — and Côte d’Ivoire, one of Africa’s biggest economies, along with many other countries in other regions of the world, with increased currency devaluation, hyperinflation, rising food prices and rising living costs. But there are also several criticisms including flawed resource management including economic mismanagement over the years and government corruption that lead to economic trouble in many African countries. Government corruption is a cause of concern in many African countries. Because of economic mismanagement and other causes, several countries in Africa had to take IMF bailout support many times. According to multiple sources, Ghana has taken the IMF bailout support seventeenth time so far since its independence.
Definitely, armed conflict and political turmoil often result in economic troubles in several African countries, where there is poverty, a lack of economic opportunities and high unemployment. Armed conflicts directly and indirectly affect the economy of many countries in Africa, though they are more frequent in some countries of Sub-Saharan Africa (which includes many African countries including the Central African Republic, DR Congo, Mali, Sierra Leone and Sudan). Conflicts decreased investment, trade and productivity and brought other impacts including human and physical capital destruction in many African countries leading to devastating economic consequences. Additionally, the IMF’s bailout is delayed and there are criticisms against the terms and conditions of its bailout loans to African countries including the reckless pursuit of domestic economic policies.
Bailout support is crucial to reduce economic crises. But it is desired that concerns are addressed. Definitely, recipient African countries need to strengthen their economies and reduce poverty. Improvement in economic management, along with reduction in corruption, is crucial in many African countries. It may also be imperative for several African countries including Ghana to reduce their excessive expenditure during elections. Improved negotiations of other African countries seeking bailout support including Kenya with the IMF may be helpful. But it is also desired that the IMF makes bailout support with conditions favoring the recipient African countries. The resolution of conflicts is also crucial to reduce the economic crisis or improve the economy of many African countries.
Amir M Sayem
Chief Editor
Dhaka Opinion Magazine
