Browsing: economic downturn

Rising in Africa

Addressing the rising inflation in Africa while supporting economic growth and cushioning the vulnerable against economic shocks requires an urgent but careful approach.

  • Multiple shocks have gripped a world economy already ravaged by the pandemic.
  • Sub-Saharan Africa has been facing one of the most difficult economic circumstances recently, with the pandemic’s delayed recovery, soaring energy and food prices, and increased public debt levels.
  • Central banks have already started raising interest rates in response to rising inflation in Africa, capital outflows, and currency devaluation caused by tighter monetary policy in industrialized countries.

A gloomy and an uncertain global economic outlook

Gloomy signs of progress in 2022 highlight a tentative global economic recovery in 2021 as risks started to manifest. Global production fell in the second quarter due to slowdowns in Russia and China. The United States (US) consumer spending also fell short of expectations.

Multiple shocks have gripped a world economy …

It remains uncertain how long this economic downturn lasts or which tech startup and investors will remain standing when it ends, but the African digital ecosystem will remain relatively unscathed.

  • The impacts of the global economic downturn began to seep in May 2022.
  • The global venture capital (VC) industry for startup funding is stagnating.
  • The African tech startup industry offers the funds tremendous possibilities to invest at a low cost, amidst the global economic downturn.

A flurry of lay-offs

After more than a year of the bull-run tech stock market and record billion-dollar investments for startups throughout the world, the impacts of the global economic downturn began to seep in May 2022. According to lay-off aggregators, tech businesses globally laid off more than 15,000 workers in May, with the firms laying off over 65,000 tech employees so far this year.

Read: Africa operating as a bloc best for economic recovery