Crystal Carter
May 28, 2009
Comparative Analysis : Two African Countries Affected by the US Economic Crisis
Senegal and Ghana
INTRODUCTION
“People from Africa are so used to struggling,” said Tifsihet Hailemariam, 28, an immigrant from Ethiopia. “We have to deal with so little, we really are not that surprised when hit with a crisis like this.”
For people who live on the world’s poorest continent the current global crisis is old news. They face a crisis of survival everyday. Some will find it hard to believe that a continent comprised of 47 countries and an abundance of natural resources is facing a decline in GDP, but it is.
Africa has made some of its biggest gains in the past few years as China, India, Europe and the US has competed for its natural resources. But now that the money has dried up, Africa, along with the rest of the world is starting to feel the heightened affects of the global economic woes. Africa is unique in this global crisis because the affects will be more paralyzing than a country whose economy was thriving in the beginning.
In times of economic unrest and instability people are apt to become more competitive and money hungry. Citizens begin to see a person who was once a comrade betray them to ensure their place on the economic ladder of wealth, success and so-called financial independence. During times like this it is hard to remember that family and relationships come first.
Although we are in hard financial times, we have discovered just how interconnected the whole globe is. Although large bodies of waters and different languages separate us we must understand that when one country fails, we realize that all countries will fail. It is because of this that we must realize that we must do away with the fact that capitalistic competition is good and embrace the term: cooperation.
Nature, history and the global economic system have combined to deprive Africans of much potential wealth and well being. Until about 100 million years ago, the earth’s landmasses were bound together as a supercontinent known as Pangaea. The southern landmasses constituted Gondwana, with present-day Africa the keystone. Through the phenomenon, of plate tectonics, or continental drift, Africa’s “children” began to leave the nest and scatter to their present positions. The presence of deep rift valleys in eastern Africa suggests that this continental separation is not yet complete. Africa’s destiny began with much potential in expanding the growth of the earth as well as the exploration of humans and nature into new and unchartered land. We must not take this beautiful story for granted. We must connect the dots.
Between the Indian and Atlantic Ocean and the Mediterranean and Red Seas lies a vast, curving land mass called Africa. It is home to the great Pyramids of Egypt, the first written language, and the first astronomers and explorers. Many great resources are found here: silver, gold, diamonds and more. A lot of blood was shed in order to have strict control over this country and a number of countries are at their current economic standing because of the free labor that indentured servitude that the hands, wombs and backs of Africans provided.
Because of the current recession that seemed to have started with the US banks and money grubbing politics. There is less money chasing resources and more and more people are becoming unemployed. No one knows when the recession will end and because of this investment is becoming scarce and people in the Third-World are facing another dilemma.
THESIS
Senegal and Ghana are said to be one of the most successful economies in West Africa. So a comparison and contrast of these two countries will help be a marker on how well other countries are doing in comparison to their neighboring countries as well as the US in its current economic crisis.
SENEGAL: SEEK INVESTMENT IN NEIGHBORING COUNTRIES
The country of Senegal has seen sparks of economic growth here and there but for the most part things of have been quite unstable. A major spark of success that Senegal has seen was its thriving fish industry, which accounts for 25% of exports. But because of the financial crisis that is being felt all over the world there has been a drop in overseas order leaving many fishermen unemployed. In an interview conducted by Al-Jazeera, some laid-off fisherman said that they have had to take work helping grocery shoppers to their cars.
Tons of exotic Senegalese seafood is being left to rot as Europeans stop buying from producers. Falling demand has caused the businesses to cut their prices in order to survive. Sadly, some of these fish are too expensive for the people of Senegal.
On the business side of the fishing market, a local business owner had to cut 90% of his staff and reduce exporting to major buyers like the UK, Italy and the US. In the last attempt at a stimulus plan Senegal has looked to fellow African countries to do trade with, especially Ghana and the Ivory Coast. According to the blog called Trade Africa, Ghana remains the easiest place to do business in West Africa and one of the top 10 economies in Africa by overall aggregate.
GHANA: OPTIMISTIC ABOUT OIL
Whereas Ghana is known for having a vibrant democracy and being economically sound. Although Ghana has signs of a growing economy it is still not up to par. There have been signs of corruption within the government; there is not an abundance of clean running water and proper sanitation. The Health Ministry of Ghana reported that eight people are killed per hour because of the unhealthy water.
While Ghana is known to be the second biggest cocoa producer in the world, the discovery of oil has promised Ghana much more economic independence in the future. With plans to start digging in 2010 some still remain skeptical. According to the South Africa Daily News, most Ghanaians remain among the world’s poorest people earning an average of $3.80 a day.
Oil rich countries like Angola and Nigeria have said that they see oil as a curse that has not improved the lives of the poor. Still Ghana’s leaders are optimistic and feel that oil will benefit Ghana’s future for the better. They say that oil money will go towards building roads, bridges and schools.
While there are many things to be optimistic about for the industrial expansion that is happening in Ghana, the global financial crisis is impacting foreign aid, commodity prices, remittances and private capital flows in Africa. Africa’s GDP growth, initially expected to be 4.9 percent, is now expected to fall to 2.4 percent. Africa is likely to be the worst hit region by the global financial crisis, although it is the least integrated region, the World Bank warned on April 21, 2009.
AFRICA’S DEPENDANCY ON FOREIGN AID: PROBLEMATIC
Africa’s dependency on foreign aid is a very sensitive issue. Since the economy is doing so badly right now, countries may be apt to slow down on the Aid that they are giving Africa. But this is a very bad idea because a decrease in aid may leave thousands of Africans in poverty.
According to the International Monetary Fund (IMF), banks are working towards helping protect the most vulnerable during this global crisis. They will focus on better targeting and higher social spending in Senegal. Based on a Poverty and Social Impact Analysis (PSIA) conducted in 2008, the authorities sought to mitigate the impact of the food and fuel price shock by establishing a targeted subsidized rate for small electricity users (implemented in August 2008). With support from development partners, the authorities intend to explore the scope for introducing a conditional cash transfer system, which would provide support to poor families conditional upon investment in human capital, such as sending children to school or visiting health centers.
CONCLUSION
There are many questions that have yet to be answered when it comes to the well being of Africa’s economy, especially during these trying times. One thing that we must realize is that we are not in this alone. We need to reach out to different countries and reward them for their economic uniqueness and work together to see how things can improve. One thing that we must do is to be inclusive. The best way to figure out how to make things work is to speak to everyday citizens and ask them what they would do in order to make their situation better. There is no reason that a country that is so rich in resources should be so poverty-stricken. We have to remember that this is not a competition its about cooperation.
