Economic Crisis Takes Centre Stage at African Economic Conference
The African Economic Conference (AEC) opened on Wednesday, November 11, 2009, in the Ethiopian capital, Addis Ababa. Launched by the African Development Bank (AfDB) Group in November 2006 in collaboration with the United Nations Economic Commission for Africa (UNECA), the African Economic Conference has, since then, become an annual event with this year’s meeting taking place against the backdrop of a severe global financials crisis that has hurt many African countries.
The conference, which has become a platform of choice for many economists, policy-makers and governments officials, has grown in importance, especially as it focuses on the analysis of African economic development issues. Earlier conferences had taken place against the background of continental economic development, which according to many experts, was faster than development in other parts of the world, giving the impression that Africa was finally inching out of grinding poverty. The reports sounded encouraging given that landlocked countries that also had little or no minerals, such as Ethiopia, were growing by “leaps and bounds”, considering their earlier performances. This hope was bolstered by the fact that governance was, on the whole, improving, conflicts on the continent were declining and young African entrepreneurs were getting a hang of their trade.
But the continent’s hopes were not going to last. The financial crisis, which was initially hurting economies on other continents, was extending its reach to Africa. Given that the continent’s economy was not fully integrated into the global economy and Africans had not overplayed the markets, it was believed that its economy will be shielded from the storm. But this thinking was unfortunately short-lived as the storm finally showed up on the continent’s shores. With many Western governments struggling to hold their economies together, their demand for Africa’s commodities took a nosedive, leaving many resource-rich African economies in a tailspin. Mining firms close down, jobs were lost in the millions and African stock markets took a serious hit from the storm.
To Africa, the price would be high. As the world became cash-strapped, with developed nations seeking cash infusions for their disintegrating banking sectors in order to rescue giant companies from going down, it became challenging for the continent to gain access to development assistance that had played a key role in its development efforts over the last two decades.
Given these challenges, many huge projects on the continent were therefore put on hold and the continent’s march towards a new economic dawn was slowed down. The continent’s economic progress was very dependent on its commodities and as the prices of these commodities plummeted, the development train lost steam and momentum, leaving many people on the continent in pain and despair. Even China’s economy, which had fueled inflation world-wide due to its insatiable thirst for natural resources could not help the continent stay out of trouble. Africa’s growth prospects were therefore reviewed by many global institutions, including the AfDB. According to the UN Deputy Secretary-General, Asha Rose Migiro, Africa’s growth had been “projected to fall from an average of over 5 percent in recent years to a paltry 1.7 percent in 2009.” She made this revelation in a speech to the regional coordination mechanism in Addis Ababa, Ethiopia, on November 5, 2009, ahead of the African Economic Conference.
China is a key player in development efforts on the continent and its role in Africa’s economic development will be one of the conference’s foci. The conference will also cover issues such as Asia-Africa relations, trade, development financing, poverty and inequality. The conference, which has been commended by the AfDB Chief Economist, Louis Kasekende, will run from November 11-13, 2009.
Written by Ayenew Haileselassie