Do what we did, Africans tell Europe

2011-09-28 11:55

Washington - As the world's finance czars clamoured this week for decisive action to clean up Europe's debt crisis, ministers from the planet's poorest region Africa were quietly saying "been there, done that".

A weekend briefing by African finance ministers at IMF/World Bank meetings in Washington attracted modest media attention, but there was quiet pride in the way representatives from tiny states like Cape Verde and Gambia were able to claim concrete achievements in managing debt and public finances.

Developing countries from across the world, including Africa, are portraying themselves as "innocent bystanders" of the economic storm boiling out of Europe and the United States, and have joined the chorus calling on the European nations in crisis to bite the bullet of painful economic reforms.

"It is not easy, it is painful, and we went through the pain, and the Europeans must be prepared to go through the pain," African Development Bank President Donald Kaberuka told Reuters in an interview.

He said the reforms needed in the ailing southern European states involved the kind of overhauls of public finances and labour markets and other structural reforms that African nations - with firm urging from the IMF and World Bank - had tackled over the last two decades and now had results to show for it.

Fund and Bank experts say sound macroeconomic reforms and better budget management are some factors that have helped propel robust growth in sub-Saharan Africa since 2000.

This has given the region one of the brightest outlooks of any region amid the prevailing gloom.

Re-profiling of Africa's risk

"The outside world still sees Africa of yesterday. We believe that this is Africa's time," Kaberuka said.

While acknowledging major challenges on the continent - huge infrastructure and energy deficits, shortages of skilled labour and the risk of political flare-ups - he said the moment had come for what he called "a re-profiling of Africa's risk".

The continent's risk profile had been grossly overestimated for too long, Kaberuka said.

"There are risks, the buffers built before 2008 are weakened, inflation is raising its ugly head in some countries because of pressure of food prices, we have residual political issues in a few countries," he said.

And the continent had good reason to worry about the threat of aid, finance, investment and trade flows falling if conditions in the advanced economies worsened.

"But are we more risky than some of these peripheral countries in Europe, which have 150% of GDP in debt, 30% fiscal deficit?" Kaberuka asked.

"All hands on deck"

Arguing the change underway in Africa was comparable to that experienced by India 20 years ago, Kaberuka said aggregate economic fundamentals on the continent - its wide internal variations notwithstanding - were something to be proud of.

"An average African country would now be growing at about 6%, we'd be having a fiscal deficit of no more than 3%, debt no more than 15% of GDP," he said.

His biggest worry was not what was happening in Africa, but what was not happening in the developed world, "the inability or unwillingness of the rich countries to take the decisions needed to return the global economy to growth momentum".

But he said emerging markets and low-income countries, the Africans included, had a role to play in trying to re-launch a new global growth momentum. "We have to get the ship moving, that requires all hands on deck," Kaberuka said.

Investment in infrastructure in Africa could help to rekindle aggregate demand for equipment and products from advanced economies, which in turn would put idle manufacturing capacity back into use, he said. This would make Africa's infrastructure agenda part of the global recovery efforts.

Upgrading power and infrastructure was critical to sustaining Africa's continuing rise and, while connectivity in broadband Internet services remained a problem, the telecoms sector on the continent was "exploding", Kaberuka said.

"There's room here for the private sector, returns are very high, cost of entry, very low, risks, very low," he added.

Energy sector reforms needed creation of sound regulatory systems and financially sound utility companies, he said.

But Kaberuka warned the continent's governments that if they wanted to avoid the kind of political upheavals seen in North Africa and the Middle East, they needed to ensure that growth was truly inclusive, and work to tackle inequalities.

"Beyond the jargon, all persons in the country must be seen to benefit, all sectors, all communities," he said.


  • sabc10 - 2011-09-28 12:08

    i would say thanks to china building infrastructure and investment

      world-weary - 2011-09-28 13:24

      we are saying that- by not giving the Dalai lama a visa:)

  • ahpretorius - 2011-09-28 12:27

    Unlike Afrika, Europe could hardly ask Europe for handouts and to write off debt. How funny are they?

      Francois - 2011-09-28 23:02

      They, the Europeans, do it far more subtly. They totally rape the idea of free economic powers by subsidising their farmers to "compete" with the one thing that Africa can produce far more cost effectively than Europe. Thus a lot of Africans could not sell their produce as Europe squandered billions in tax money to pay for their farmers. The initial debt, that later had to be written off was pretty much anyhow ploughed back into Europe or spent on governments the Europeans knew were corrupt. This is a case of the cows have come home, literally. On this one, Africa has my support. All the loans to Europe, must come with strings attached like that it can only be spent on African produce.

  • DoublySalmon - 2011-09-28 12:48

    What African country has achieved the status of being considered developed? South Africa excluding homelands was developed. The rest not so much and today... still not. lol. One thing is certain, Africans either play victim or claim to be king, but every instance they're wrong.

      Francois - 2011-09-28 23:05

      Does it matter if anybody calls you developing if that "anybody" asks you for a loan? The action in this case speaks louder than the words. Mauritius is developed - to answer your question in three simple words.

      DoublySalmon - 2011-09-29 16:42

      Mauritians - not really the same as Bantu Africans are they but does actually drive the point home that despite being in the same economic climate as the rest of Africa with fewer resources they have achieved a high HDI ranking whilst since 1994 the South African HDI ranking has stagnated at 1994 levels.

  • Pekkie - 2011-09-28 13:00

    "innocent bystanders" lol ha ha ha ha ha, More like queuing for handouts from Europe, Imagine how much debt Europe could have managed with the money they give to Africa in aid, Makes one think!

      Pekkie - 2011-09-28 13:01

      “I bought a bird feeder. I hung it on my back porch and filled it with seed. What a beauty of a bird feeder it was, as I filled it lovingly with seed. Within a week we had hundreds of birds taking advantage of the continuous flow of free and easily accessible food. But then the birds started building nests in the boards of the patio, above the table, and next to the barbecue. Then came the poop. It was everywhere: on the patio tile, the chairs, the table … everywhere! Then some of the birds turned mean. They would dive bomb me and try to peck me even though I had fed them out of my own pocket. And others birds were boisterous and loud. They sat on the feeder and squawked and screamed at all hours of the day and night and demanded that I fill it when it got low on food. After a while, I couldn’t even sit on my own back porch anymore. So I took down the bird feeder and in three days the birds were gone. I cleaned up their mess and took down the many nests they had built all over the patio. Soon, the back yard was like it used to be …. quiet, serene…. and no one demanding their rights to a free meal.

      Pekkie - 2011-09-28 13:01

      Now let’s see. Our government gives out free food, subsidized housing, free medical care and free education, and allows anyone born here to be an automatic citizen. Then the illegals came by the tens of thousands. Suddenly our taxes went up to pay for free services; small apartments are housing 5 families; you have to wait 6 hours to be seen by an emergency room doctor; your child’s second grade class is behind other schools because over half the class doesn’t speak English. Corn Flakes now come in a bilingual box; I have to ‘press one’ to hear my bank talk to me in English, and people waving flags other than our flag are squawking and screaming in the streets, demanding more rights and free liberties. Just my opinion, but maybe it’s time for the government to take down the bird feeder. If you agree, pass it on; if not, continue cleaning up the poop.”

      Pekkie - 2011-09-28 13:03

      I got this as a email and thought i would share with you all! ;)

  • Martin - 2011-09-28 13:11

    VERY FUNNY!!! Europe needs money or investment from an outer party (maybe Martians) as Africa received BUCKETS full of Euros and Dollars for there "renaissance"!

  • KarenC - 2011-09-28 13:40

    The only reason Africa is worried about Europe's debt problem is because less Europeans will be donating to the starving, fat bellied orphan children of Africa, and rather trying to just feed themselves. And tell me, how did Africa "go through the pain", when Africa didnt have nearly as much money to loan out in the first place? Europe and USA are in this financial position coz they loaned out too much money, and didnt get enough back. The is no way the Federal Reserve bank would loan Africa the same 'amount' of money as those 'developed' countries.

  • StephanM - 2011-09-28 13:44

    well done for managing the 5c the west gave you!

  • nxumalo sicelo - 2011-09-28 14:02

    I am a black man and I hate to say it a lot of black leaders are a joke. Europe is in trouble today because she was trying to save you in a way. To take care of the countless kids African sire and the countless wives African leaders take. All Africal leaders know is corruption all all kinds of filth. Makes me want to vomit!

      AJ2 - 2011-09-29 14:03

      European banks also still made a lot of mistakes, however a large reason why most African countries are not affected all that much is also because most of their populations live hand to mouth and dont really contribute to their economy, whilst the size of the economies is so small, they have largely been left to themselves from a global perspective. Their failure to make something of themselves has sort of done them a favour (just this once).

  • greatgodpan - 2011-09-28 14:48

    do not fear for europe....europe has skills,culture,ability,rule of law,work ethic,morals ...these things have nothing to do with hard they are a little short of cash at the moment...this will past.....the banking may collapse....a new better one will replace it....this may be the whole idea in anycase...going bankrupt has some distinct advantages.....the skills, culture etc can be readily turned into cash flow anytime...........

  • Libertador - 2011-09-29 11:17

    Europeans must be prepared to work like dogs, no more living as overloads on the sweat of others. It's about time they started planting vegetable gardens. There is no more surplus to be exploited from the colonies.

  • AJ2 - 2011-09-29 13:57

    Uhm, apples and oranges I am afraid..

  • letsee - 2011-09-30 08:42

    African governments were and are not subject to voting and therefore could "starve" their people. The democratic world is more cautious and to an extent the desire of conquering of votes is the cause of the present problems.

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