IMF Summit Wants Bailout Strategy for Africa

Perege Gumbo (Guardian)--The two-day Africa-International Monetary Fund meeting ended in Dar es Salaam yesterday with President Jakaya Kikwete, IMF managing Director Dominique Strauss-Kahn and former UN secretary general Kofi Annan jointly calling for concerted and urgent world action to reduce the impact of the global financial meltdown on African economies.

In a joint statement issued after the meeting, they said the crisis affected the lives and hopes of many people around the world. They stated that the crisis called for urgent responses from all partners and called for the international community to fulfil the promises they made to increase aid flow appreciably. ‘More resources for the poorest are urgently required, including through the doubling of the IMF’s concessional resources and countries must further open to trade with Africa’, said the statement.

The leaders also asked African nations to continue pursuing and strengthening their economic policies and ensure good governance ‘which could be sacrificed in this time of crisis’. They added that further efforts were needed to create conditions that would attract private investments to the continent.

The leaders explained that it was crucial for IMF to further support Africa through more financing extended with greater flexibility, enhanced policy dialogues and a strengthening of Africa’s voice in the Fund. They advocated global solidarity in meeting the severe challenges facing Africa and the world in general, in part by ensuring that the continent was ‘fully represented in the evolving global architecture’.

United Nations Deputy Secretary General Dr Asha-Rose Migiro had earlier underscored the importance of overseas development assistance to Africa, especially at this time when the world is facing an economic downturn. She told the meeting that the continent urgently needs the assistance so as to attain the eight UN Millennium Develop Goals, where it is lagging behind, as well as address other pressing issues.

The UN’s second-in-command said it was of crucial importance for international organisations and development partners to protect Africa’s poorest and vulnerable countries from the impact of the financial crisis by honouring their financial commitments. She noted that private external finance had been frozen and there was little room to raise more domestic revenue, adding that there was a need for a genuine desire to deliver on existing commitments to increase ODA or the MDGs would remain elusive.

Dr Migiro underscored the gravity of Africa’s plight, saying the economic downturn combined with high food prices, climate change and volatile energy prices in presenting daunting challenges to the continent’s policy makers. She called on the donor community to deliver on promises made at different times and meetings, such as the one made at the 2005 Gleneagles G8 Summit to more than double annual ODA to Africa by next year worth US$ 62 billion in nominal terms. ‘The amount sounds like a huge sum, but it appears more attainable when we consider the trillions of dollars that have been committed to stimulus packages in industrialised countries,’ she told the meeting, called to discuss how African economies could cope in the wake of the global crunch. She said the goals could be achieved if existing commitments to support Africa’s development were delivered in accordance with the recommendations of the UN secretary general’s MDGs Africa steering group.

African countries had committed themselves to globalisation and the international community should help them ‘reap its rewards and transform these gains into real reduction in poverty’, she added. Dr Migiro further noted that Africa’s isolation from international capital markets did not protect it from the global economic turmoil but, to the contrary, limited its options for financing the MDGs. She added that unless the international communities paid attention to the continent’s requests, ‘the decade of hard-won gains in growth, poverty reduction and macroeconomic stability will be imperilled by the global financial crisis’.

Experts say a quarter of the world’s countries have experienced instability owing to the global economic downturn and Africa must weather the current crisis for peace and security to prevail. ‘Further instability and uncalculated human suffering will happen and there are no other alternatives except to meet the aid commitments made,’ she said.

African central bank governors and finance ministers also issued a statement underlining the fact that the current financial crisis required strong partnerships. They said that Africa’s financing needs were urgently required as the global crisis takes its toll and that concessional support would be important for helping countries to bolster their social safety nets and preserve fiscal space for vital development projects. ‘We will build on the first steps that were taken in 2008 to increase the voice and representation of African members of the IMF, with a view to quickening agreed measures to ensure diversity of the IMF’s membership was fully reflected in its governance structures’, the stated.

These resolutions and goals adopted at the meeting are due to be tabled at the coming G20 meeting in London. President Kikwete assured delegates that he would present them to British Prime Minister Gordon Brown.

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