Economic crisis hitting Africa hard, says bank official
Geneva - Africa is not immune to the world's financial troubles, the head of the African Development Bank said Friday, asking that at the upcoming G20 international economic conference the continent not be forgotten.
"For us, in the low income countries, the crisis is reaching us and hitting very hard," Donald Kaberuka, the bank's president, said.
The continent was witnessing contractions in all major sectors "much faster than we thought."
"We fear that the achievements of the last 10 years will be wiped off," he added, noting that Africa had experienced a sustained period of growth until last year.
Speaking with journalists in Geneva, Kaberuka gave the example of Ghana which was working itself off aid dependency and issued bonds on the capital markets for the first time in 2008.
Since the markets declined and credit dried up, other countries, like Zambia and Tanzania, find that they cannot follow suit and sell their debt.
Kaberuka said that for Africa a severe economic decline would mean more than job losses and home foreclosures.
"In the poorest of the poor countries it is about people's lives being lost," he said. "Children will not be able to go to school or access medical treatment."
He stressed that this would happen not because of African governments' policies but rather because of the international crisis which started elsewhere.
The meeting next month in London of the G20 - the largest economies - should focus on finding the way out of the crisis but also include Africa and other low income countries in the solutions, the bank president said.
The idea proposed by the World Bank, that developed nations put aside 0.7 per cent of their stimulus packages for poorer countries, even if fully implemented would still leave a 10 billion dollar gap between the needs and the available capital.
This would mean more resources would need to be mobilized in London for the most vulnerable, said Kaberuka.
Trade financing is said to be drying up, particularly hitting emerging markets unable to obtain the credit they need for commerce. About 90 per cent of international trade involves some sort of credit. (dpa)