Thursday 23 October 2008

Africa Credit Crunch

We have been hit hard by the credit crunch over here, but you may think that in Africa the effect has been even bigger. It seems that this is not the case.

This is due smaller economies in Africa which are affected less than huge economies such as the US and Britain and that banks in Africa have been very conservative with their lending unlike over here where recently you could get a mortgage five times larger than your salary. Davindar Sikand, managing director of Aureos Africa Fund, says that "most financial institutions are not directly impacted".

So is it all roses in Africa? The answer is no, it may well be the case that the price of eggs have gone up and you have to take out a small loan to pay for a pint, but Africa is still one of the poorest continents on the planet. The average wage in Malawi is just $170, whereas here in the UK it's $40,000! It's no better in South Africa which has raised investment money on foreign markets and is currently in an energy crisis.

So what is the answer? One might be to save some money and take time out to travel to Africa; you'll spend less than you would in the UK and at the same time boost their economies. Be sure that your money stays in the country you visit by using local tour companies, restaurants and accommodation.

BBC on-line article

The Times online article

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