African Countries Endorse Measures to Mitigate Impact of Global Financial Crisis
"Financial Crisis Could Not Have Come at a Worse Time for the African Continent"
Tunis, 12 November 2008 – African finance ministers and central bank governors rose from a day-long meeting on Wednesday in Tunis after the adoption of a communiqué on what their countries would do individually and collectively as well as the type of support they expect from the international community to cushion the likely negative impact of the global financial crisis on their economies.
"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 said in the 17-point statement.
The Conference also called for the resumption of the Doha Round in light of the spillover of the financial crisis into trade, and to stimulate the world economy, enhance opportunities for the poor and restrain protectionist tendencies.
"In light of the financial crisis, the Round should pay particular attention to the sequencing of reforms in financial services. We will take steps to improve the supply capacity of African economies by enhancing competitiveness, building infrastructure and promoting greater economic integration within Africa."
The ministers expressed their belief that the global slow-down 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 by the adverse medium- to-long-term effects on their countries’ economies.
The conference commended actions taken by the G8 Group of countries to restore confidence in the markets, to unfreeze credit and money markets, to ensure access to liquidity and to recapitalize and support important financial institutions and prevent their failure.
"We welcome the new instruments put in place by the International Financial Institutions (IFIs), and the steps taken to provide urgent support to the emerging market countries. We call upon them to be ready to provide appropriate support, in an expeditious and flexible manner, to African countries in case of contagion," they emphasized, adding, however, that it was clear that a global crisis required a global response.
They committed to deepening economic reforms in the full conviction that such reforms have served African countries well, yielded strong macro-economic 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.
Noting that the unprecedented loss of consumer confidence had depressed commodity-led African exports, the ministers reaffirmed the importance of economic diversification; said they 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 committed to more effective mobilization of domestic revenues and deepening of African capital markets for a more robust mobilization of local savings and financial integration and mandated the AfDB to intensify its capital markets programmes.
The global financial crisis will also feature in discussions at the 12-14 November third African Economic Conference 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 a solution to the global financial crisis.