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11.03.2009 Business & Finance

Africa risks losing gains

Africa risks losing gains

The Director of the Africa Department of the International Monetary Fund (IMF), Ms Antoinette Sayeh, has said that the slowdown in the global economy, depicted by declining commodity prices and tighter credit markets, can seriously threaten growth in African economies.

Speaking with civil society organisations and the media ahead of a high-level international conference on the way forward for Africa within the context of the current global financial crisis, Ms Sayed said, "the gains of the past decade are at risk."

She added that Africa's ability to weather the financial storm would depend on firm policies from its governments as well as strong partnership and support from the international community.

The conference, which opened in the Tanzanian capital, Dares Salaam, Tuesday, is being held under the auspices of the International Monetary Fund (IMF) and hosted by the Tanzanian government.

She quoted an IMF report entitled "The Impact the Global Financial Crisis on sub-Saharan Africa", and said the economic growth in the region was expected to slow in 2009, by about half of the initial expected growth levels a year ago.

"African policy makers must therefore balance two priorities of supporting domestic activity, while maintaining macroeconomic stability," Ms Sayeh stressed, adding that those policy responses should be combined with additional support from donors.

"While African policy makers are rising to meet this unexpected challenge, d0nors must also play their part. They must maintain their commitments and scale up, not scale back their support," the director for the IMF's Africa Department stated.

Former Secretary-General of the United Nations and President of the Global Humanitarian Forum, Mr Kofi Annan, will address the opening ceremony of the conference which is under the theme "Changes: Successful Partnerships for Africa's Growth Challenges".

The President of Tanzania, Mr Jakaya Kikwete, the Managing Director of the IMF, Mr Dominique Strauss-Kahn and the former President of Botswana Mr Festus Mogae, are all expected to address the conference to set the tone for the technical men and women to get to work.

Other key speakers at the forum include Dr Donald Kaberuka, President of the African Development Bank, Dr Nogozi Okonjo-Iweala, the Managing Director of the World Bank and Angel Gurria, the Secretary-General of the Organisation for Economic Cooperation and Development (OECD).

The conference will examine the various challenges confronting the continent in. the wake of the global financial crisis and address the key policy questions with the common goal of forging a renewed partnership for Africa's growth in the 21st century.

Issues that will be looked at during the two-day conference which began Tuesday will include how best to stimulate the private sector and the financial sectors to advance the' goals of economic development; how countries can reduce the risk posed by external shocks and the turbulent global economy, and avoid the "resource curse" for countries with natural resources such as oil and diamond, and what should be the direction and requirement for Africa's donor partners, including the IMF.

Africa is changing and successes there and elsewhere can provide valuable lessons for all. The past decade has seen a marked improvement in economic performance across Africa, with a significant impart on poverty reduction.

The global demand for primary commodities, greater capital flows, and debt relief has helped but the current global financial turmoil presents an unprecedented challenge for African policy makers.

The task will be to draw on past achievements to ensure that Africa does not only weather the storm but emerges from it stronger. The key long-term challenge is to raise pro-poor growth by seizing opportunities of additional resources and increased integration into the global economy and addressing the pressing needs to improve infrastructure, agricultural production, economic diversification, health and education.

The conference will be attended by more than 300 delegates, including finance ministers, central bank governors from Africa, with representations from development partner as well as the media, policy makers, academia and civil society.

It will also offer them the opportunity to rack brains on the way forward for Africa within the context of the current global financial crisis.