African Countries Endorse Measures To Mitigate Impact of Global Financial Crisis

By Joseph Inokotong

African finance ministers and central bank governors rose from a day-long meeting last week Wednesday in Tunis, Algeria after adopting a communiqué on what their countries would do individually and collectively, and the support expected from the international community to cushion the likely negative impact of the global financial crisis on their economies.
In a 15-point statement, the conference said: “We note that this crisis could not have come at a worse time for the African continent; it constitutes a major setback at a time when African economies were turning the corner.
“It is undermining the significant progress made over the last ten (10) years and, further exacerbates the impact of the recent sharp increase in food prices and volatility in the oil markets.
“We are gravely concerned that the prospects for attaining the Millennium Development Goals will be reduced.”
The Conference also called for the resumption of the Doha Round in light of the spillover of the financial crisis to trade, and to stimulate the world economy, enhances opportunities for the poor and to restrain protectionist tendencies.
“In light of the financial crisis, the Round should pay particular attention to sequencing of reforms in financial services. We will take steps to improve the supply capacity of African economies' through enhancing competitiveness, building infrastructure, and promoting greater economic integration within Africa,” said a statement from the Press Unit of the Economic Commission for Africa (ECA).
The ministers expressed their belief that the global economic slowdown will diminish trade opportunities, access to finance, migrant remittances and Foreign Direct Investment (FDI).
They said in spite of the fact that African countries have remained relatively unaffected by the first round effects of the crisis; they were nonetheless deeply concerned at the adverse medium- to-long-term effects on their countries' economies.
The conference commend actions taken by the G7 Group of countries to restore confidence in the markets, to unfreeze credit and money markets, to ensure access to liquidity, to recapitalize and support important financial institutions and prevent their failure.
“We welcome steps taken by the International Monetary Fund to provide urgent support to the emerging market countries and call upon the International Financial Institutions (IFIs) to be ready to provide support, in an expeditious and flexible manner, to African countries which may suffer from contagion,” the communiqué emphasized, adding that it was obvious that the global crisis demanded a global response.
They pledged to deepen economic reforms with the conviction that such reforms have served African countries well, yielded strong macroeconomic stability, fostered growth and resilience to external shocks. They also agreed to strengthen the regulation and oversight of financial systems and continued harmonization of fiscal and monetary policies, in light of the continuing financial market volatility.
The Forum noted that the unprecedented loss of consumer confidence had depressed commodity-led African exports, necessitating the ministers' reaffirmation of the importance of economic diversification; which they promised would take necessary actions for the judicious use of export and fiscal revenues, the recognition of the need for sound management of external debt as well as the promotion of regional integration.
They promised to ensure a more effective mobilization of domestic revenues and deepening of African capital markets for a more robust mobilization of local savings, financial integration and mandated the ADB to intensify its capital markets programmes.
The global financial crisis will also feature in discussions at the November 12-14, third African Economic Forum which is running parallel to the Ministerial Conference organized by the AfDB, the African Union Commission and the UNECA to mobilize Africans with a view to seeking an answer to the global financial crisis.