Essay Balance of Payment in Africa
I agree with the statement that political, cultural, social and economic factors have forced countries in Africa to have consistent deficit balance of payment. Below are some findings and some supporting points on why such factors …show more content…
Political stability- It has played an important role in determining the stability of balance of payment deficit. The most significant deterioration of political risk perceptions between June 2008 and June 2009 was over Sub-Saharan Africa and Middle East and North Africa. This is roughly the comparative severity with which the global economic crisis affected emerging market regions and the social unrest showed the highest increase among the political risk. This was followed by the related risk of violent demonstrations and the burden was put on the capital account. This was all related to the global financial and economic crisis which affected the balance of payment. An example would be Kenya where the post election violence really devastated the country’s financial crisis.
Deputy Managing Director of the International Monetary Fund (IMF), Takatoshi Kato says that the global financial crisis presents tremendous challenges for Africa, despite