Financial Crisis in Africa The internal and external destruction

Introduction

The financial crisis in Africa has not only affected the government and its economy, but also its people and citizens that live and thrive there. This is a problem just as deadly as any disease; the poor and middle class are being deprived from crucial funding that they need to survive. They can't pay for things like food, water, and other necessities either because their job doesn't pay well or they are unemployed. The unemployment rate today in Africa is around 27%. The lowest it has been was 25% and some countries in Africa have about over half unemployment rate within their population. This calamity of financial destruction and downfall happened in 2008 when the United States was in so much debt they couldn't recover and the economy dropped. This affected foreign trade to other countries and it restricted them and scarcity was at such a high rate for food, water, resources, and money. However, outside countries are not the only reason Africa is in so much trouble, their own government has also taken a tole on the well being of its citizens. The government has refused to give money that is seriously needed to improve or help solve current issues. However, their government has refused to do so and keep the money for them selves. For example, the people of Darfur was in critical need of their government, but has refused to fund their needs and has just decided to kill them with the help of other tribes like the Janjaweed.

How It Started

The financial crisis, which reached its peak in 2008, (started in 2007), just added to the many other problems such as the hunger and water issue that has also been a major problem in Africa. Not to forget that the environment also takes a toll on the country and its citizens. For example, in 2011 there was a drought that was considered to be the worst in 60 years. It lasted about a year. Doughts are often the cause of hunger and lack of water, but also just simply where they live could have an effect of local and foreign trade.The financial crisis started because of huge banks making too many loans that they didn’t have enough money or couldn’t control and/or the people who filed for the loans couldn’t pay them off. People couldn’t pay off the debt and eventually so much accumulated that they couldn’t recover. The economy plummeted and so did the housing market, this caused so many people to lose their jobs and houses. The poor economy affected foreign trade and money with other countries and their economy greatly affected third world countries the most and still does just like in Africa.

The Effects on Economy

The African government will likely lose about $578 billion due to not being able to meet external demands of other countries and trade. Also, their financial system is not effective which does not help with a more developed outside countries. For example, oil exporters will suffer the most financial damage losing about $420 billion in about two years because of lack of efficient trade and not meeting the demand of other countries. According to the African Development Bank, they say that almost all forms of growth rates will decline about 5-10%. However, oil countries will be hit the hardest losing about 20%. As a result of this the poverty rate has gone up. This means the countries in Africa can not now keep up with the demands and they just fall further. Before the financial crisis, some countries in Africa were meeting their goals but trade and foreign finances fell apart and poverty has reached one of its highest points. On top of this most countries don’t have access to international capital markets so their banks cannot grow and make foreign advancements to be better. As a result, they either aren't getting back what they put in, or they simply don't have to tools and technology they need to keep up with other countries in and out of Africa.

Effects on Lower Class Citizens

Referring to what was stated earlier, unemployment rate has reached an all time high in Africa. It has affected many people and families alike whether they are wealthy or poor. It has been known for a long time that outside influences haven't helped Africa grow and become a better country, however Africa's government is also guilty of causing more problems than they can handle on top of others. A couple examples are Darfur and Rwanda genocides, disease, hunger, and many more. Although the Rwanda genocide may be about social class and discrimination, and disease isn't something that will go away, the government isn't focusing on what's really important which are the people that suffering the effects of these problems. It was estimated that since 2003 about 300,000 people have died, and during the Rwandan genocide about 2 million died. The government and its people are in problems that they either started or have no control over and it's affecting the citizens and lower class the most.

Bibliography

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  • The Global Financial and Economic Crisis and the South: Impact and Responses / CODESRIA." The Global Financial and Economic Crisis and the South: Impact and Responses / CODESRIA. Codesria, 18 May 2012. Web. 15 Feb. 2017.http://codesria.org/spip.php?article1566
  • "What Caused the Financial Crisis & Recession?" Positive Money. N.p., n.d. Web. 15 Feb. 2017http://positivemoney.org/issues/recessions-crisis
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