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African Finance Ministers Discuss Economic Recession

  • Scott Bobb

Senior African finance officials say per capita income in Africa fell for the first time in a decade because of the global economic recession. But during a meeting in Malawi they also noted that the economic rebound had improved growth prospects for this year.

African finance ministers and central bank governors have concluded a two-day meeting in Lilongwe that focused on ways to soften the effects of global economic shocks on Africa.

They were among several-hundred delegates from across the continent to attend a joint meeting of the African Union and the U.N. Economic Commission for Africa.

ECA Executive-Secretary Abdoulie Janne told delegates Africa's projected economic growth rate for this year would improve to 4.3 percent from 1.6 percent last year, although he noted this rate is still too low to meet the Millennium Goal of halving poverty in five years.

"Moreover, global recovery remains fragile and given the vulnerability of our economies to external shocks it is only prudent to remain vigilant and to imbibe the hard-learned lessons of global economic crisis," said Janne.

Janne said the global economic crisis had compelled a global re-think of development strategies and policies.

The ministers heard the global recession had cut demand for commodities, a major source of export revenue in Africa. This hurt economic growth and destroyed jobs.

Officials said increased trade between African countries would reduce such external shocks. Trade within Africa reportedly accounts for less than 10 percent of all African exports.

Malawi's President Bingu wa Mutharika opened the conference, saying greater cooperation in the production and distribution of food would boost regional trade and reduce hunger.

"A nation that depends on other nations to feed it cannot claim sovereignty. Africa therefore has agreed that we must conceptualize food security on a regional basis," Mutharika said.

He called for the creation of regional structures to build up and maintain food stocks in various regions and for transport networks to carry these stocks from areas with food surpluses to those with food deficits in times of need.

Mr. Mutharika criticized the economic liberalization policies of international donor groups.

"We were told that poor African farmers in rural areas must compete through market structures with highly advanced farmers in industrialized countries," Mutharika adds. "We were also told that subsidies reduced market liberalization and are not conducive to good governance. Unfortunately, Africa accepted this falsehood. How wrong we have been and what a price we have paid."

Mr. Mutharika, after his election six years ago, implemented a program to provide poor farmers with fertilizer and seed at subsidized prices. In a few years Malawi became a net exporter of food and its annual economic growth rate reached six percent.