Understanding the policies and impact of African central banks during the recent global recession
: Cases of Nigeria and South Africa

  • Munyiginyi Birali

Student thesis: Master typesMaster de spécialisation en économie internationale et du développement


The recession of 2009 originating from United States of America did not let indifferent the global economy. Developing countries were expected to be resilient to the crisis, but small exporting countries were more likely to be hit by the recession. The 2009 recession was transmitted to Sub-Saharan Africa through trade and financial channels. The onset of the recession made the trade volume and the commodity price collapse. Moreover, FDI, Remittances, and foreign aids were significantly affected by this crisis. The IMF only note the decline net portfolio investment in Sub-Saharan Africa. Countries less opened to global economy and those that were in good macroeconomic health were resilient to this shock. The goal of this paper, is to assess the impact of the 2009 recession on South Africa and Nigeria (two biggest African economies), evaluate the effectiveness of monetary policy to recover the economic activity and understand the impact of G7 monetary policy on these countries. Building on regression model, the paper analyzes the factors explaining macroeconomic fluctuations in South Africa and Nigeria. This model is based on three blocks, namely the international block (G7-countries), South African block and Nigerian block, to capture the effect of external shock on each country separately. The model is built on the assumptions that all external shocks coming from neighboring countries or from monetary and economic unions (which SA and Nigeria are part) are endogenous for Nigeria and South Africa, i.e these two countries do not respond to these shocks (Local cross-border shocks are endogenous). This assumption pushes to construct a model considering G7 shocks and domestic shocks. The results reveal that the monetary policy effect on GDP during the recession was significant in Nigeria, but insignificant in South Africa. The results also point out that macroeconomic fluctuations in Nigeria and South Africa are generally influenced by monetary policy shocks, credit shocks (domestic and G7) and the trade channel (food price, terms of trade, etc.).
la date de réponse29 août 2020
langue originaleAnglais
L'institution diplômante
  • Universite de Namur
SuperviseurRomain Houssa (Promoteur)

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