As I write this article I’m in transit, going to attend the annual meetings of the World Bank and International Monetary Fund in Istanbul, Turkey. However the main issue on my mind was – will Africa’s fragile economies get a fair hearing at the meetings?
The international environment has affected the economic prospects of Africa significantly. Despite the fact that most governments put in place broad measures to reform their economies.
For instance, Rwanda’s economic growth is projected to decline to 5.3 per cent from 11.2 percent last year.
The impact of the global economic crisis has led to a sharp fall in Rwandan export revenues and a slowdown of economic activity in the country.
National Bank of Rwanda’s 2009 first semester statistics show that the country’s trade deficient stood at $532 million (Rwf300.7b) as all major exports, except tea registered significant declines.
Specifically the crisis has affected African economies in three areas: the restructuring of the global demand, the collapse of the price of commodities and the scarcity of foreign direct investments, funds and various flows towards Africa.
Yet, the undisputable fact is that the crisis did not originate from Africa! It started in the developed world! But Africa has had to bear the burden of the external shocks of global crisis. And Africa is likely to be the worst-hit region by the crisis, although it is the least integrated region into the global economy and financial systems.
Private capital flows to Africa, which had risen to $53 billion in 2007 from $30 billion in 2002, have dried up, forcing a cancellation, delay or postponement of projects. Africa’s GDP growth, initially expected to be 4.9 per cent, is now expected to fall to 2.4 percent.
This is much lower than the 6.4 per cent forecasted prior to the crisis and represents a three percent decline in growth.
As a result, this week’s Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund will focus on the impact of the global financial crisis and its effects on developing countries in a bid to find solutions to help countries hit hard by the downturns in capital flows, trade, remittances, and tourism.
Given what transpired at the just concluded United Nations Assembly – where nuclear energy was given priority over most pertinent issues affecting Africa, it remains to be seen whether the forthcoming meetings of the world’s biggest financial institutions will behave differently.
I will resist the temptation of being pessimistic about this round of meetings.
However, the general feeling among African countries is that the measures decided in Turkey should provide more assistance to African countries trying to contain the crisis.
The idea is to make sure that the modalities of implementation of measures put in place by these meetings are done in the best way in shortest time possible.
The author is a journalist The New Times.