By Omoh Gabriel, Business Editor
The Meeting of Africa Finance Ministers and Central Bank Governors rose in Abuja with the conclusion that the current crisis reinforces the need for African countries to undertake the fundamental structural reforms that are needed and pledge to continue with the necessary reforms in the continent and regional integration. The body said in a 17 point communique â€œWe are committed to efforts to improve efficiency in expenditure management and to increase domestic resource mobilisation, notably through effective tax revenue mobilisation and administration.
â€œIn this regard, we acknowledge the formation of the African Tax Administration Forum and view this initiative as an important step in support of these efforts. We underlined also the need for us to push forward with measures to accelerate regional integration and for appropriate support from development partners for the regional integration agenda.
According to the communique the body of Finance Ministers and Central Bank Governors agree that â€œAn effective global response leading to long term economic sustain ability and growth requires strong and committed leadership; we look forward to positive results and agreements on concrete actions from the forthcoming G20 meeting in Pittsburg. We reaffirm our view that a global response and long term economic sustain ability must take full account of the interests and views of all, entrenched in the new principles being discussed within the G20. We therefore remain concerned that Africa is not adequately represented in the G20 and other international discussions, and call for a strong African participation. Present at the just concluded meeting wereÂ Nigeria, South Africa, Botswana, Tanzania, Kenya, Algeria, Cameroon, and Central Bank of West African States (BCEAO).
The communique said â€œOur objective at this meeting was to review the latest information pertaining to the impact of the crisis on Africa, to take stock of recent internal and international developments, and to agree African perspectives to be fed into the global discussions, in particular those leading up to the next G20 Leaders Summit in Pittsburgh on 26 September. We noted that whilst the full effects of the global slowdown remained uncertain and would vary from country to country, it was clear that the impact on African countries, although initially limited had become, in some cases severe, for example countries dependent on mineral products such as diamond and copper. Growth is still contracting in all regions. We note that even if global recovery begins to set inÂ 2010, at the earliest, the recovery of our economies may take longer. The crisis therefore presents a major challenge as to how to implement short term responses to the crisis while staying focused on long term sustainability. We urge that existing commitments be implemented expeditiously, but additional action is necessaryâ€.
According to the resolution at the summit â€œThose African countries with capacity for counter-cyclical response have taken action, within their means. In addition, they continue to implement programs of economic reform and to mobilise domestic resources. However the majority lack resources for such a substantial fiscal response. We commend the resolution of the London G20 in addressing the key issues of restoring growth, financial stability and the needs of emerging countries; some progress has been made in implementing the commitments, including through additional resources to the IMF.Â That is essential for a resumption of global trade and growth.Â However, attention must turn to urgent implementation of all the commitments in meeting the needs of low income countries, and of Africa.
â€œWe considered Africaâ€™s resource requirements, both long term and short term, set against the background of declining revenues, much lower investment flows, reduced access to capital markets and to trade finance.Â We welcome the G8 call for an assessment in 2010 of what is needed to attain the MDGs. While the pre crisis needs in Africa are clear and well documented, the crisis induced needs require assessment continuously. It is evident, for example, that the demand for trade finance is strong and growing. We welcome the G8â€™s renewed commitment to agriculture and food security; the Comprehensive African Agriculture Development Programme (CAADP) provides a solid framework for support and the African Development Bank has been an effective vehicle over the years; increasingly, through support to water and infrastructure.
â€œWe have been particularly concerned at the impact of the crisis on hitherto well performing countries that had been able overtime to reduce aid dependence. We commend the African Development Bank for a swift and appropriate response in providing budget support to them. As we did in Cape Town and Dar es Salaam, we strongly call for a general capital increase for the AfDB. We understand demands for resources from all international financial institutions will be increased at this time but we also believe requisite weight should be given to building African institutions.
â€œWe noted that in response to the crisis, the African Development Bank and the World Bank have taken exceptional measures to increase their grant lending by introducing new instruments, fast tracking implementation, and front loading commitments. We strongly call for the early conclusion and replenishment of their concessional windows to ensure there is available resources for the years after. We recognized the AfDBâ€™s comparative advantage as a channel for investment in all areas of infrastructure and economic integration, and in convening coordinated action within Africa. We encouraged the African Union Commission and African Heads of States to write to donor capitals urging the support for a general capital increase (GCI) and for a substantial increase in ADF XII for the African Development Bank.
â€œWe believe that if that is done, we can mitigate some of the adverse effects on concessional window dependent countries for whom we believe a special action is needed to enable them to maintain priority programs of investment, and to provide social safety nets for the most vulnerable.Â Without such investment, this group of countries will not be able to participate fully in the recovery when it comes and the costs of sliding back could be highâ€ the communique noted.