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Africa calls for help from effects of global crisis

CARTOON
By | March 19th 2009

By Susan Anyangu

African leaders at the pre G-20 conference have called for better governance and surveillance of the international financial system.

The leaders who felt the continent is hurting from a crisis it had no role in creating, also want reforms of the International Monetary Fund to give Africa more leverage.

Speaking yesterday upon arrival from the one-day conference in London, Prime Minister Raila Odinga said the West should do more to bail out the continent from the effects of the economic crunch. "The West has a responsibility to assist Africa because the continent has nothing to do with this crisis, but is a mere victim of a problem caused by the West," he said.

African leaders at the conference agreed to support ‘the Zoellick Initiative’, which is a vulnerability fund aimed at aiding African countries.

‘Vulnerability fund’

World Bank President Robert Zoellick in January challenged developed countries to dedicate 0.7 per cent of their economic stimulus package to such a fund for African countries suffering in the global downturn.

Developed countries are planning big stimulus packages to combat the financial crisis. However, African nations do not have the financial might for similar endeavours. African leaders also agreed that any new assistance to the continent should be additional to prior commitments by the West.

"The overall picture was that the prices of African commodities are falling due to low demand, across the continent, tourism arrivals are also falling," Raila said.

The pre-G-20 conference was constituted ahead of the G-20 meeting in April, to give Africa a channel through which its concerns may feature during the main forum.

"The tendency has been to ignore Africa as if we are not part of the global economy. The fact is that Africa is affected like the rest.

Africa may not feature very prominently at the G-20 conference, but it will form part of the agenda for discussion," the PM said.

This year’s G-20 conference comes at a time when the world is facing a severe economic downturn, the worst in the conference’s 39 years of existence.

While the crisis emanated from the West, Africa has lately been experiencing a spillover in the form of declining demand for commodities from the continent.

Last week, Finance Minister Uhuru Kenyatta admitted that Treasury is facing a financial deficit that could push the Kenyan economy to its knees.

Projects cancelled

"African leaders reported at the talks that remittances from abroad are down, as so is Foreign Direct Investment. Multinational companies are also reported to be canceling projects they had committed to undertake in Africa," said Raila.

Various key sectors have also been hit hard by the crisis, with tourism taking the hardest beating.

Interventions and recommendations proposed at the pre G-20 conference are the only hope for Kenya and other African economies.

African leaders present at the conference, were Ethiopia’s Prime Minister, Meles Zenawi, and presidents Jakaya Kikwete (Tanzania), Sirleaf Johnson (Liberia) and Seretse Khama (Botswana).

Other who attended the high level meeting include; Finance ministers from South Africa, Nigeria and Rwanda.

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