Awakening Africa Magazine

EconomyLifestyle

What African Countries Can Go The Sri Lanka Route And How Can They Save From Such A Disaster?

2 Mins read

Sri Lanka is in the grip of one of the worst economic crises in its history. Prices have shot up, purchasing power has significantly reduced, and essential life items are out of stock in the country.

While most household incomes have been reduced, about 11% of the families reported having no income at all. Sri Lanka presents a grim image at the moment, but if experts are to be believed, this is only the start as several other African countries can go down the same route if not careful.

Here is a look at the African countries on the verge of an economic crisis and how they can avoid it

What Is Happening In Sri Lanka Right Now?

As the world went under a series of unfortunate events, the developing and underdeveloped countries are the ones that suffered the most impact. These include the long spell of Covid-19 shutting down tourism in the country, constant fiscal deficits, tax cuts, and more such situations that led to the economic crisis in Sri Lanka. It was made even worse due to the Ukraine war.

All the external pressure and poor management from the inside made Sri Lanka fall prey to one of the worst economic crises, where at least 22% of the population needs assistance to feed themselves. The prices of food and fuel have increased multifold, and the production of food has decreased by 40-50%.

The country is out of emergency medical supplies, which has forced them to scale back on operations and surgeries. Power cuts are rampant throughout the country, which has slowed down economic activity even more. Sri Lanka is drowning in debt.

Can African Countries Suffer The Same Fate?

With the current economic conditions in the world, Sri Lanka might not be the only country to suffer this fate. Several African countries are right on edge as well.

Nigeria saw a 6.1% decrease in its GDP during Covid, South Africa had its GDP decline by 17.1% in 2020, and Angola saw a 1.8% decrease in the GDP in 2020. Other Sub-Saharan African countries, Ghana, Kenya, and Ethiopia, have witnessed decline too and can suffer a similar fate.

Like many other nations in the world, these countries suffer from debt distress, especially after the pandemic and the current Ukraine-Russia war. Moreover, these economies are not prepared enough to deal with this distress.

Is There A Way To Shield From The Crisis?

There is a need for drastic reforms to make sure the countries don’t fall prey to the worst economic conditions. African countries need to focus on creating more jobs for the people to create more opportunities for income for the common people.

Reforms in policies related to energy and telecommunications are essential. The pandemic clearly showed how important digital technology was to survive in the upcoming world. African countries need to create more policies to incorporate digital technology into their systems and create more income opportunities in that space for people.

Several countries have already started building up social protection measures to shield themselves.

However, there is one more important factor that is needed to protect against the economic crisis, and that is the help of the foreign community. To get out of the high inflation, income stagnation, and pressing debts, the world needs to come together and help each other.

Only then can several African countries make it out the other side safely

Related posts
FinanceLifestyle

Do You Feel Embarrassed For Not Knowing About Personal Finance?

2 Mins read
Nowadays, having money is considered to be the ultimate possession. It’s debatable if the adage “money cannot buy happiness” is true. However,…
BusinessEconomy

5 Most Profitable Business Ideas In Africa

2 Mins read
Africa is no longer a dark continent it once was. It’s economy is growing by leaps and bounds and the technological boom…
EconomySport

Is Sports The Way Forward For African Economical gains?

2 Mins read
Africa is a continent that has been growing at a steady rate. It has been taking leaps in the fields of education,…
Want to be notified when we make any update ?
Subscribe to our newsletter

1 Comment

Leave a Reply

Your email address will not be published.

×
EconomyFinanceLifestyle

The Secret Behind A Successful Lifestyle After The Pandemic In Africa