For a variety of reasons, outlined in a new essay of mine published by Project Syndicate, the global financial crisis hasn’t harmed sub-Saharan Africa much — and probably won’t. The reason, which I outline in a new essay being distributed to newspapers around the world by Project Syndicate, is that in Africa cash is king. Today’s capitalist crisis flows from a glut of credit — and now the burden of unsustainable debt in the aftermath of economic bubbles popping. Yet Africa’s reliance on cash — long viewed as a great economic hindrance is paradoxically a strength today. Home-mortage crisis? In Phoenix, yes, but not in Kampala or Accra, where most home buyers put down most or all of the purchase price. Debt in Africa is even a foreign concept for many business, whose owners rely often on “family capital,” raised from a network of relatives, friends and — significantly — members of a single ethnic group.
Is Africa immune from financial contagion?
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