Question: We have learned that the Meeting of the Deputies of the Committee of Ten Ministers of Finance and Central Bank Governors took place at the side of the ADB Annual Meetings in Abidjan. What were the objectives of this meeting?
Response: Yes, the C-10 Deputies indeed had an informal side meeting on Thursday May 27 at the AfDB Annual Meeting. Being an informal meeting, one of the objectives was to provide an update on key developments regarding G-20 related activities since the Committee’s last meeting in February in Cape Town. The meeting created an avenue for discussions to build a strong and unified African voice in preparation for the upcoming G-20 Summit Meeting in Canada in June 2010. Economic issues were also discussed, especially those pertaining to prospects for Africa’s economic recovery and exit strategies from expansionary policies.
Question: What have been the Bank’s contributions to C-10 activities and how important have these been?
Response: The Bank’s role in supporting C-10 activities has been very prominent and important. From the moment the crisis hit, the Bank took a firmer stance in assisting its regional member countries (RMCs) both from the knowledge and operational fronts. On the knowledge side, the Bank’s consistent and timely provision of detailed analysis of how the crisis affects Africa provided a solid basis for focused policy discussions of the C-10 and targeted policy responses by the RMCs.
As the crisis underscored the importance of reinforcing Africa’s voice in the global economic policy debates, the Bank, together with the UNECA and AUC, pulled their efforts together to ensure that the Committee of 10 became instrumental in pursuing Africa’s interests in this regard. Recognizing the crucial role that the Bank is playing in this process, the C-10 at its February meeting entrusted the Bank to host the Secretariat for the Committee’s activities.
Question: The Bank has consistently provided analytical background for the C-10 meetings, and has certainly carried out some new analysis for this informal meeting. What were the key messages?
Response: Now that Africa is on the rebound – which is a message underscored by our African Economic Outlook launched earlier this week – one of the important questions is when and how to exit the expansionary policies that some African countries adopted during the crisis. Clearly, the answers will depend on prospects for global recovery and the speed with which the advanced economies implement their exits.
Moreover, they will also depend on country-specific circumstances, including integration into the global economy and the macroeconomic situation. But the general recommendation is that, where feasible, exits should not be rushed, but be gradual and orderly. Many countries may want to start with fiscal consolidation, which tends to be technically and politically difficult. At the same time, African policy makers need to ensure that important social outlays as well as public expenditures on infrastructure remain protected to lay foundations for continued growth and poverty reduction.