C-10 to Discuss Development Agenda for G20 Summit in Seoul
The fifth meeting of the Committee of Ten Finance Ministers and Governors (C-10) will take place in Washington, DC on 6 October 2010, preceded by the second meeting of the C10 Deputies on October 5. The C10 is mandated by African leaders to review the impact of the financial crisis on Africa, to advise on Africa’s response, and to put forward African perspectives to the G20. The meeting in Washington follows the recent Korea-Africa Economic Cooperation (KOAFEC) ministerial meeting in Seoul. It is intended to help put development and Africa at the center of the G20 agenda in Seoul.
The following topics will be discussed at the C-10 meeting:
- Africa’s economic recovery;
- Domestic resource mobilization;
- Financing of sustainable energy solutions in Africa.
Policymakers will discuss Africa’s economic outlook and how to maintain the continent’s fast and relatively robust recovery. As the uncertainties around the global outlook remain, African governments are maintaining broadly accommodative policies in 2011, while gradually refocusing on medium-term objectives and fiscal consolidation. The medium-term objective focuses on development and poverty reduction through strong, sustained, and shared growth. The emphasis on macroeconomic policy is thus shifting from low inflation towards growth. To be effective, such policies should be accompanied by structural reforms and the development of social safety nets.
Domestic revenue mobilization remains key for most African countries as the most viable financing source for reforms and other development expenditures over the longer term. Low income countries focus should be primarily on developing the private sector as a basis for revenue generation, while avoiding high and complex taxes which constrain entrepreneurship.
Africa will also need to mobilize additional resources, including from external investment. In addition, advanced countries should support Africa with adequate, timely, and predictable aid. Although development assistance is difficult to mobilize in times of fiscal consolidation in donor countries emerging from recession, helping Africa reach its potential and become a global growth pole is in the longer term interests of a stable and prosperous global economy.
The enormous energy gap in Africa together with the continent’s natural resources can be viewed as opportunity to attract private investment, accelerate growth, and embark on sustainable and lower carbon growth path. To close the energy deficit, a combination of financing instruments will be needed. The private sector will need to contribute and new innovative sources of financing will need to be found. At the same time, the public sector has a vital role to play, also through crowding in private resources.
Africa’s perspectives must be taken into account when global policies are designed and global environment-related funds disbursed. African leaders have emphasized that Africa needs to have more control over new finance for sustainable energy programmes and climate adaptation, and have called for 40 percent of the resources in the Copenhagen Accord to be allocated to Africa and managed by the AfDB. In response, the AfDB is setting up the Africa Green Fund to receive and manage these resources.