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African Finance Ministers Discuss Economic Impact of Surging Food and Fuel Prices


The annual meeting of the African Development Bank (AfDB) continues Thursday in the Mozambican capital, Maputo. Bank president Donald Kaberuka Wednesday told African finance ministers that Africa’s strong growth rate of six percent has not translated into reducing the continent’s poverty levels.

In the wake of protests over rising food prices, Congolese President Dennis Sassou N’Guesso reportedly told the meeting that the Bank should promote food security in order to consolidate peace in Africa.

In a report on urbanization in Africa released Tuesday, the Bank said 12-13 million Africans would leave the countryside to live in urban areas in 2008, thereby making it more difficult to provide food and other services.

Kwadwo Baah-Wiredu is Ghana’s finance and economic planning minister. From Maputo, he told VOA that urbanization in Africa is real, but in Ghana’s case the rural areas are also growing.

“Ghana is seeing growth, growth in terms of volumes and then quantity, and also you see that communities are also expanding, old cities are growing, villages are also coming together to be urban areas. They are connected by good roads and telecommunications. So the urbanization is real. We need to take this challenge as an opportunity to develop our respective countries,” he said.

Baah-Wiredu said a rural village like Bui has been growing because of the construction of a dam there, and also the discovery of oil in the western part of Ghana, which have attracted people from all walks of life and professions to move in the areas.

He said Ghana has taken steps to meet the challenges created by its urban and rural expansions.

“We in the ministry of finance have written a book called 2057 Budget Document that actually recognized that in 50 years’ time we are going to have big cities, and we need to connect them, we need to provide primary schools, universities, you need to generate more electricity. So in all our budgets provisions have been made to take care of the relatives. There’s no doubt about it,” he said.

The Maputo meeting is also discussing the surging food prices and power shortages and their impact on development. Baah-Wiredu said Ghana is also feeling the pinch of the rocketing world food and fuel prices.

“We used to buy crude oil at $55 per barrel last year, and we consume about 60,000 barrels a day. Now we are buying it around $125. That means we need to find more money in terms of foreign currency to pay for the cost. So obviously inflation or price increases are relative because those who are the transportation sector in carting our fruits, produce from the farm gates are going to charge higher. So there is no doubt that we are facing some inflation within the system. In Ghana food that we are experiencing shortage or price increases is basically wheat, which is made into flour which is converted to bread and other products,” he said.

Baah-Wiredu said focus on improving Africa’s agricultural output alone is not the answer to the continent’s food crisis.

"Developing a nation is not only one sector – agriculture – because if you produce food and you have bad roads you cannot cart the fruits. So in Ghana, for example, we have undertaking the cocoa routes that must be tarred because if the routes are not tarred and it has rained, vehicles cannot move there,” he said.

He disagreed that Africa’s projected urban population growth is the result of what some have termed rural exodus.

“Yes I do disagree because the towns are growing, the villages are growing. So really if you tell that we have fixed villages, fixed rural areas, and those rural areas telephone systems are there, schools are growing. So I would say let’s move around from the area that the rural areas are fixed and they never turn around to be urban areas because urban features are in all the villages and the smaller towns, especially when economic activities like mining, construction of dams, discovering of oil, and improvement in universities, then things are changing,” he said.

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