Why Athens' debt crisis is likely to become a tragedy for East African economies too
Saturday July 4 2015
If the crisis spreads to Europe, it would impact the trade, tourism and agricultural export earnings of this region’s economies. TEA GRAPHIC | NATION MEDIA GROUP
The economic tragedy playing out in far away Greece could mean massive losses for East Africa’s farmers, fishermen and hotel owners should the contagion from the debt default spread to the rest of Europe, the top market for fresh produce, tourists and capital.
The euro’s decline and the dollar’s gain would make imported commodities, ranging from oil to machinery, more expensive, exposing the economies to bigger current account deficits, weaker currencies and high interest rates.
Capital flows to the region would also be impacted by risk mitigation measures being taken by other European countries — perspectives that may spill over to the East African region.