Many Africans will fall back into poverty, making the Millennium Development Goals (MDGs) even harder to attain as the global economic recession continues to prevail, the Economic Report on Africa 2009 (ERA 2009) says.
“This is because African countries do not have the resources to support their economies even though they are also feeling the pains of economic recession,” explains the report, jointly published by the United Nations Economic Commission for Africa (ECA) and the African Union Commission (AU).
The report dubbed, “Developing African Agriculture through Regional Value Chains,” will be launched on Friday at the Kigali Serena Hotel. The Minister of Finance and Economic Planning, James Musoni justified the impact of the credit crunch on MDGs.
“Poverty and hunger were the only goals that we didn’t hit. Hunger is not alarming with agriculture growing by about 11 percent (in first half) but poverty is still a major challenge,” he explained.
Musoni said the target of having half of the population above the poverty level is still a challenge though achievable.
MDGs refer to eight international development goals that 189 United Nations (UN) member states and at least 23 international organisations ratified in order to steer economic development and fight poverty.
They also aim to spur development by improving social and economic conditions in the world’s poorest countries.
According to the latest African Economic Outlook 2008/09, Rwanda was off track on the reduction of the child mortality rate.
Five goals were early achieved or on track while eradication of extreme poverty and hunger was regressing.
About 90 percent of Rwanda’s population depends on agriculture.
The report also notes that all major industrialised countries have pumped billions of dollars into their economies to support struggling firms and stimulate demand for goods and services.
It is also projected that GDP growth in Africa will decline from 5.1 percent in 2008 to 2 percent in 2009 as a result of lower demand for Africa’s export and a sharp decline in commodity prices.
Similarly, a projected decline in capital inflows to Africa, including aid, foreign direct investment and remittances will, accentuate the impact of the global credit crunch.
Owing from the above situation, this year’s report suggests that African countries need sound domestic policies as well as continued aid flows and targeted financing facilities from international financial institutions to mitigate the impact of the evolving crisis.
It calls for special attention to agriculture, since Africa is heavily dependent on this sector for providing employment, generating economic growth, foreign exchange earnings and tax revenue.
“Modernising agriculture is crucial to development and industrialisation in Africa, to food security, sustained poverty reduction and integration of Africa in the global economy”, it says.
ERA 2009 points to the Comprehensive Africa Agriculture Development Programme (CAADP) of the African Union.
This creates regional value chains that link agriculture to other sectors of the economy as the best way to initiate and sustain development in Africa.
The Rwanda was late last year estimated to be in need of 1.7 billion dollars in aid to meet the MDGs, with per capita aid of $190 for about 9 million people.