How should Africa react in order to cope with the financial crisis? This issue has been examined from two different perspectives by the African Development Bank (AfDB) Group Research Director, Léonce Ndikumana. “The effects on the private sector and households should, first and foremost, be minimized,” he said while explaining that states must do all they can to sustain proper levels of investments in public sectors across the continent, especially pro-poor investments, just as the AfDB ECA and OECD have been doing. With regard to development partners, he said they were expected to honour their commitments by fulfilling their financial promises. “African countries are faced with increasing deficits, while expenses are increasing,” Mr. Ndikumana said. He said that, at the bilateral and multilateral levels, development partners, including the IMF and the World Bank, understand that promised aid must be sustained and that official development assistance should even be increased. He said that to better position the continent after the crisis, “it is necessary to consolidate growth bases by sustaining infrastructure investments in order to facilitate trade and private investments.” He added that it was necessary to scale up internal resource mobilization.
Mr. Ndikumana called for the strengthening of regional integration “at the trade and capital market levels.” He questioned the existence of 53 capital markets in 53 countries, adding that the volume of intra-African trade was too low, accounting for only 9% of overall African trade. He expressed optimism regarding the continent’s response to the global financial crisis. He called for a consolidation of intra-African trade and capital markets infrastructure. He said that African leaders were aware of this as there were, today, clear strategies for the consolidation of banking systems across the continent.