African Countries Urged To Diversify Their Economies

African Countries urged to Diversify their Economies Edited by B. Minteh June 25, 2009. African countries have been urged to follow Zambia’s example of planning to cut down government expenditure as one of the responses to the global economic crisis. Milimo Moyo, a Zambian lawyer speaking at a United Nations (UN) event in New York City, hailed President Rupiah Banda’s recent announcement that his administration would introduce stringent steps to reduce government spending. Milimo made the comments at a special UN event called “Recovering from Global Crisis: Towards an Action Plan for Africa and the Least Developed Countries”. The event was co-organized by the Office of Special Advisor for Africa (OSAA) and the U.N. University alongside the U.N. Conference on the World Financial and Economic Crisis and its impact on Development. “I believe that the current economic crisis, though challenging, presents African countries with an opportunity to diversify their economies and also take other immediate and practical steps to reduce its adverse impact,” Milimo told a packed audience of UN and government officials as well as representatives from the International Monetary Fund IMF) and other international organizations. “I commend President Banda’s recent announcement seeking to cut government expenditure because it is a good example of the kind of measures that African countries can implement without recourse to external assistance,” she said. Milimo urged other African countries to emulate such intentions and to also look at ways to reduce systematic risk in their respective financial sectors. She also acknowledged African countries’ need for financial assistance in some cases. The UN event was organized to consider the impact of the global economic crisis on Africa and the Least Developed Countries (LDCs). One of the aims of the discussion was to focus the attention of the international community on the policy responses and measures needed to accelerate Africa and LDCs recovery from the crisis. Speakers at the event included Mr. Roger Nord Senior Adviser for African Development at the International Monetary Fund (IMF), Mr. Cheik Sidi Diarra, Under-Secretary-General Special Adviser on Africa, Ms Asha-Rose Migiro, UN Deputy Secretary General and Mr. Stephan Groff Deputy Director at the Organization for Economic Cooperation and Development. Participants were agreed that numerous aspects of Africa’s development were being negatively affected by the economic crisis and that the continent needed help to address the crisis’ effects. “Prior to the crisis, African countries enjoyed real GDP growth between the periods 2003 to 2008 but the financial crisis has brought this to a complete halt,” said Diarra. And the IMF reiterated its objective to quickly and effectively scale up assistance to

Africa. Responding to a question from Milimo on whether the IMF would consider removing certain conditionalities from its loans to enable low income countries meet immediate needs arising from the economic crisis, IMF representative Roger Nord said that the IMF’s Exogenous Shocks Facility enabled low income countries to access certain loans without conditionalities. “We have responded quickly and conditionalities have not been an issue,” he said citing recent loans to Kenya and Tanzania as examples. The UN Conference on the economic crisis (which ended on June 26, 2009) was attended by more than 140 countries; the conference sought to decide on emergency and long term responses to help relieve the adverse impact of the crisis, particularly on the world’s most vulnerable nations.