Debt, Infrastructure and Trade in Africa

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Debt, Infrastructure and Trade in Africa

Tunis, 24 November 2005 – African Finance Ministers concluded a two-day Consultative Meeting in Tunis on Wednesday, with proposals to help African countries tackle key challenges and adapt to the changing global environment.

The meeting made recommendations on debt cancellation, integrated infrastructure development, the effect of rising oil price increases in Africa and the World Trade Organisation Doha Round trade talks in Hong Kong in December.

On the debt issue, the ministers called for the clarification of the conditions, cut-off marks and implementation deadlines stressing that "the coverage of the multilateral debt initiatives does indeed lead to a 100 percent cancellation of debt outstanding and disbursed, including debt owed to the non-concessional ADB window."

The ministers said non-HIPCs regional member countries facing special economic difficulties ought to benefit from debt relief. These concerns will be tabled before the meeting in Washington next month of deputies of the African Development Fund (ADF) and the International Development Association (IDA).

The conference discussed the wide gap in integrated infrastructure development in Africa and welcomed the creation of the African Infrastructure Consortium to be hosted by the ADB. It also stressed the need for African countries to include regional infrastructure development in their national plans and prioritize them in their budgets.

On oil, the ministers expressed concern about the adverse impact of the oil price increases on net-oil importing African countries and proposed that a special oil fund be considered to help them absorb the shock and support the continent’s development efforts.

In a final communiqué, they advised African countries "to develop alternative sources of energy, including hydro-power and other renewable sources as well as increase energy efficiency".

The meeting acknowledged the importance of a more open global trading system for enhancing growth and employment prospects in Africa, and called for speedy dismantling of trade barriers and elimination of trade distorting subsidies, especially n agriculture, to broaden trade opportunities for African countries.

Impediments to the  expansion of regional and South-South trade should be removed, the ministers said, stressing the importance of enhanced dialogue between the ministers of finances and ministers of trade to ensure that trade issues are mainstreamed in Poverty Reduction Strategy Plans and national development programmes.

Noting that African countries needed to be supported in building their capacity to negotiate, the gathering called on the African Union, the Economic Commission for Africa and the ADB to provide coordinated support to the countries in this regard.

In conclusion, the ministers welcomed the ongoing institutional reforms in the ADB aimed at increasing its operational effectiveness. They recognized the importance of strengthening coordination between the Bank, the African Union, the NEPAD Secretariat and African regional economic organisations.

The meeting called on the Bank and development partners to address the special problems faced by post-conflict countries as well as by land-locked island countries.

The Ministers called on the ADB to convene a similar gathering within the next six months during which concrete measures to address the issues raised would be tabled.

Speaking in a post-meeting press conference, the chair of the event and Burkina Faso’s Economy and Development Minister Seydou Bouda and ADB President, Donald Kaberuka, were happy to note that all regions of the continent and all its regional economic organisations were in Tunis for the meeting.

The ad-hoc ministerial conference was hosted by the ADB in close collaboration with ECA, represented by its new Executive Secretary, Abdoulie Janneh.