World Economy

Many African Economies Broke

Many African Economies BrokeMany African Economies Broke

In what is one of the greatest ironies of modern times, more African countries are facing starvation while some are bankrupt despite being endowed with resources.

Angola has openly declared bankruptcy as some other countries are reportedly in economic upheavals, AllAfrica reported.

Even more worrying is the pathos of economically challenged countries like Mozambique and Zimbabwe that have been brought to their knees by crippling foreign debt.

The countries have been pleading with international financial institutions for rescue even as analysts warn that the turmoil following Britain’s exit from the European Union would likely affect the continent’s biggest economies.

They say the top performers—Nigeria, South Africa, Egypt and Kenya—may be the hardest hit by the Brexit crisis, and the aftershocks could be worse than what followed the 2008 global credit crunch.

Angola’s downward spiral is despite the fact that the country is the second-largest producer of crude oil in Africa, and has enjoyed the enviable status of being one of the continent’s fastest growing economies.

Many were shocked when veteran leader Jose Eduardo dos Santos admitted on June 22 that the country, which relies heavily on imports, was broke and could not buy essential goods.

Addressing his cabinet, President dos Santos pointed out that the country’s economy was recording just 1% annual growth, compared to five, six or even seven in the recent past.

Analysts have however been quick to point out that the oil revenue has not benefited ordinary people.

 Practical Monopoly

Instead, as elsewhere in Africa, the vast oil earnings have resulted in the emergence of a privileged elite that has practically monopolized the national cake and produced some of the richest people on the globe.

Instructively, the United Nations has highlighted the lopsided character of the Angolan economy. Recently, the organization said the country’s 26 million people were wallowing in poverty even when the economy was growing at more than 7%.

Dos Santos has admitted that Angola has been managed in an “extremely complicated environment” due to foreign exchange scarcity sparked by the depression of oil prices.

Dependence on oil exports has also proved to be Nigeria’s Achilles heel, resulting in the dire economic straits the country faces, putting in doubt its acclaimed status as Africa’s leading economy.

Other African countries on the verge of bankruptcy are Mozambique, Zimbabwe and South Sudan.

Amid reports that the South Sudan government cancelled celebrations for its fifth anniversary of independence on July 9, three UN agencies—the Food and Agricultural Organization, Unicef and World Food Program—have cautioned that the level of hunger in South Sudan could be unprecedented.