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Forecasts for Africa’s economic growth in 2009 have been cut back sharply, from 6.7% in October to 3.25% in an IMF report to this month’s meeting of finance ministers in Dar es Salaam. Africa's banks are less exposed to toxic debts than their counterparts in industrialised nations, but plunging commodity prices will do worse damage. Although outright recession should be avoided, former UN secretary-general Kofi Annan said Africans were entitled to feel "aggrieved" by the "double standards" of international institutions which had failed to discipline the "recklessness and perverse incentives" in the biggest economies. Africans could be "the greatest casualties of a crisis that we did not create," he warned. Finance ministers will repeat their demands for a new donor-led stimulus package for Africa at the G20 meeting of world leaders in London in April, where their demands are likely to be overshadowed by the global crisis. This bulletin includes reports of Kenya’s former finance minister, recently restored to cabinet, South Africa’s triple-term veteran Trevor Manuel, and newcomer Tendai Biti in Zimbabwe. This bulletin includes reactions from the African press to the return to cabinet of Kenya’s former finance minister, the longevity of South Africa’s triple-term veteran Trevor Manuel, and newcomer Tendai Biti in Harare. - Mark Ashurst Director, Africa Research Institute |
• Welcome to our first edition of storylines, an occasional e-bulletin compiled from our archive of stories in the African press. In designing this bulletin, we hope to add some perspective to the important news stories of the moment. And by comparing this week's headline news with relevant precedents from across the continent, we hope to offer a useful indicator of larger trends and developments in African politics, economics and society. |
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The West messes up and the continent suffers - IMF told Tanzanian President Jakaya Kikwete accused the International Monetary Fund (IMF) of treating the US and the EU too leniently in relation to the global economic crisis. Speaking at an IMF conference on Africa, in Dar es Salaam, he said the IMF should have done more to prevent the crisis and argued that no country should be considered untouchable. "I am sure if an African country had caused this crisis, the IMF would have jumped and screamed about lack of discipine and the need for countries to stick to prescribed rules and guidelines of financial stability," he said. Kofi Annan, former Secretary General of the United Nations, also speaking at the conference, echoed the Tanzania leader's sentiments. "Africa has every right to feel aggrieved at this moment," he said. "We could be the greatest casualties of a crisis that we did not create. Africa is not responsible for the lack of oversight, institutional recklessness and perverse incentives that have tiggered the financial crash." Annan questioned the commitment of western countries to poverty reduction in low-income countries. "Trillions of dollars have been committed in the last few months for bailout and stimulus packages.This compares with a total of US$100 billion a year in development aid, yet more than that has been spent on rescuing one US company," he said. |
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Projects worth $3 billion stall as credit crunch hits home Saturday, 14 March 2009 President Jakaya Kikwete of Tanzania said his country is directly feeling the effects of the global economic downturn. more |
Finance minister warns of disaster without urgent financial aid Friday, 13th March 2009 Zimbabwean finance minister Tendai Biti warned that the country faced "disaster" without an urgent injection of cash from the international community. more |
IMF warns of slow African growth Monday, 9th March 2009 A report by International Monetary Fund (IMF) re-revised Africa’s growth predictions for 2009. more |
Kimunya bounces back as Cabinet reshuffled Wednesday, 28th January 2009 Kenyan President Mwai Kibaki conducted a mini-cabinet reshuffle, re-appointing former finance minister Amos Kimunya as minister of trade. more
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IMF sees Africa growth dipping to 6% Thursday, 23rd October 2008 The International Monetary Fund (IMF) revised down Africa’s growth projections as the global economic crisis and high commodity prices look set to hit the continent's economies. more |
Manuel reappointed, inflation up Friday, 26th September 2008 South Africa’s new president Kgalema Motlanthe moved quickly to reappoint Finance Minister Trevor Manuel, only days after he resigned from the cabinet. more |
| Africa Research Institute is a non-partisan think tank based in London and founded in February 2007. Our mission is to draw attention to ideas which have worked in Africa, and to identify areas where new ideas are needed. For more information please visit our website www.africaresearchinstitute.org | ||
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Projects worth $3 billion stall as credit crunch hits home Saturday, 14 March 2009 President Jakaya Kikwete of Tanzania said his country is directly feeling the effects of the global economic downturn. Speaking at an International Monetary Fund (IMF) meeting of finance ministers and central bank governors in Dar es Salaam, President Kikwete announced the suspension of two major investment projects - a nickel mining project worth US$165m and an aluminum production project worth US$3.5bn. The projects would have created thousands of jobs, and made Tanzania self-sufficient in aluminium production. Kikwete said Tanzania is also feeling the effects of falling commodity prices. “Cotton exporters are finding it difficult to sell their cotton and some are already threatened with bankruptcy. The same applies to the price of Arabica coffee, our other major traditional export crop.” Cotton prices have fallen from 82 US cents a pound in July 2008, to the current price of 45 US cents. Between August and December 2008, Arabica coffee prices fell from US$ 158 to US$104 per 50 kg bag. Kikwete concluded by saying, “The world economy risks a deeper and more prolonged recession. Sub-Saharan countries will suffer from steeper reductions in external exchange earnings and remittances, declining corporate profitability, incomes and aid flows.” Finance minister warns of disaster without urgent financial aid Friday, 13th March 2009 Zimbabwean finance minister Tendai Biti warned that the country faced "disaster" without an urgent injection of cash from the international community. His comments came shortly after the Australian government became the first western government to announce that it would resume development aid to Zimbabwe. In recent years most aid to the country has addressed humanitarian needs only. The Australian foreign affairs minister Stephen Smith said: "Australia will provide AU$10 million (US$6.6 million) to help prime minister Tsvangirai and the so-called inclusive government of Zimbabwe to restore basic water, sanitation and health services and relieve the suffering of the Zimbabwean people." Diplomats in Zimbabwe have said that other countries will soon resume development aid. But Biti said that aid channelled through NGOs and charities will not be sufficient to ensure the country's recovery. He argues that he, as finance minister appointed by prime minister Morgan Tsvangirai, should be trusted to take care of foreign funds. IMF warns of slow African growth Monday, 9th March 2009 A report by International Monetary Fund (IMF) re-revised Africa’s growth predictions for 2009. Released ahead of a meeting of IMF African finance ministers in Dar es Salaam, the report predicts that growth in sub-Saharan Africa will slow to 3.25%. It cites the fallout from the credit crisis and a drop in commodity prices as the principle determinants of the projected slump in growth rates. In 2008, the IMF predicted that Africa's growth rate for 2009 would be 6.7%. Antionette Sayeh, the IMF’s Africa department director, said: "The gains of the past decade, during which many countries in sub-Saharan Africa saw sustained high rates of economic growth and rising income levels, are at risk." Africa’s direct exposure to the global financial crisis is limited. Few African banks invested in financial assets at the root of the crisis. But IMF report argues the indirect effects of the financial crisis are likely to hit Africa hardest, namely the sharp fall in commodity prices, coupled with the likely reduction in remittances and foreign investment. Kimunya bounces back as Cabinet reshuffled Wednesday, 28th January 2009 Kenyan President Mwai Kibaki conducted a mini-cabinet reshuffle, re-appointing former finance minister Amos Kimunya as minister of trade. Kimunya was forced to resign as finance minster in July 2008 after parliament passed a motion of no confidence in him following the controversial sale of the Grand Regency Hotel. The findings of the Cocker Commission, set up in July 2008 to investigate Kimunya's role in the sale, have not yet been made public. Former MP Paul Muite said, “The president is telling Kenyans that the appointment of the Cocker Commission was merely a public relations exercise. Why did he appoint it, receive its report but decline to make its findings public only to ambush Kenyans with the re-appointment.” Vice chairman of the Law Society of Kenya, James Mwamu, said that the secrecy of the Cocker Commission and the re-appointment of Kimunya “were all indicators that Kenyans had been taken for a ride”. IMF sees Africa growth dipping to 6% Thursday, 23rd October 2008 The International Monetary Fund (IMF) revised down Africa’s growth projections as the global economic crisis and high commodity prices look set to hit the continent's economies. A new economic outlook report forecast that economic growth will fall from 6.5% to 6.0% in 2009. Growth in oil exporting countries is expected to fall by half a point to 8% as a result of lower than expected output in the Niger-Delta, Equatorial Guinea and Chad. It had been hoped that sub-Saharan Africa would be insulated from the global downturn. Economic growth in Africa has been largely internally driven and African banks have comparatively limited exposure to foreign markets. But decreases in tourism, remittances, aid and foreign direct investment, coupled with volatile commodity prices, look set to take their toll on African economies. Benedicte Christiansen, deputy director of the IMF’s African department, warned: “Since we made these projections, things have turned for the worst, so they are probably on the optimistic side ... No country is spared the ramifications of what is happening globally.” Manuel reappointed, inflation up Friday, 26th September 2008 South Africa’s new president Kgalema Motlanthe moved quickly to reappoint Finance Minister Trevor Manuel, only days after he resigned from the cabinet. Manuel resigned, along with a host of other cabinet ministers, following the decision of the Executive Committee of the ANC to ‘recall’ Thabo Mbeki from the national presidency. The move is intended to reassure investors worried about a major shift in policy in the South African economy. President Motlanthe told Parliament, "mine is not the desire to deviate from what is working. It is not for me to reinvent policy." Manuel is a highly respected internationally, and has been one of the main reasons behind the country’s longest period of sustained economic growth. Lucy Bethell, currency strategist at the Royal Bank of Scotland, said, “I think it's a welcome step because obviously the market wanted to see Manuel in charge and policy continuity ..... [But] the fact that Mbeki was ousted may show that the left wing is growing in influence ... and that may weigh on sentiment." Remove me from this list |
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