ADDIS ABABA, February 3 – African leaders discussed on Tuesday ways to ride out the global economic downturn, fearful that 2009 will see trade hit and reductions in much-needed aid and development finance.,
Earlier sessions of the African Union summit were dominated by the election of Libya\’s Moamer Kadhafi to head the bloc as well as the conflicts and political strife blighting the continent, but the final day was being devoted to money matters.
Leaders gathered in the Ethiopian capital Addis Ababa warned that Africa would struggle to cope with the global downturn, which could end years of growth in many countries driven by record commodities prices.
"It has now become clear that the global economy is undergoing a deep crisis. Every week the prognosis for the world economy is a bit worse," Ethiopian Prime Minister Meles Zenawi said at the start of the debate.
As demand has fallen in industries around the world, commodity prices have also come crashing down, creating new problems for the continent\’s big exporters.
Angola, which rivals Nigeria as Africa\’s biggest oil exporter, is expected to see exports drop 30 percent in 2008, according to the World Bank.
The World Bank says that Africa\’s overall economic growth slowed by around 1.4 percent last year to 5.4 percent, with exports expected to drop two percent from 2007.
Foreign direct investments have dropped from 2.1 percent of gross domestic product to 1.5 percent in developing countries, with the drops especially steep in Africa, the Bank says.
"The financial crisis that grew into an economic crisis is now becoming an employment crisis, and in the coming months, for some, it will become a human crisis," World Bank boss Robert Zoellick told the summit on Monday.
"Many of you have already seen the danger signs, on top of the poverty, hunger and malnutrition we saw last year as a result of soaring food and fuel prices."
Zoellick has called for rich countries to donate 0.7 percent of the stimulus packages they approve for their own economies to a fund for developing countries which would be managed by international lenders.
UN Secretary General Ban Ki-moon echoed the call for rich countries to consider poor nations\’ needs as they seek to keep their economies afloat.
He warned that the downturn would likely hurt Africa\’s "growth, trade and financial flows, but also the fight against poverty and the likelihood of reduced development assistance."
Even before the global downturn, Africa was not expected to meet all of the Millennium Development Goals, a series of targets aimed at reducing poverty and living standards around the globe, Ban noted.
"In responding to this crisis, the international community must take into account the needs of poor countries, and stimulus packages must take this appropriately into consideration," Ban said.
"They should never lose sight of the challenges of the most vulnerable people."
Earlier sessions had been dominated by debate over the election of Libyan leader Kadhafi as head of the 53-nation bloc, as well as the unrest that affects so many African nations.
The growing political uncertainty in Madagascar remained in focus at the summit, as the mayor of the capital Antananarivo tries to force out President Marc Ravalomanana.
Leaders, who were working on a final communique, have already agreed to support Sudanese President Omar al-Beshir by seeking a one-year delay to efforts to indict him for war crimes before the International Criminal Court.
Somalia\’s new President Sheikh Sharif Sheikh Ahmed looked to intensify his consultations with neighbouring countries following his election on Saturday.
Although neighbours have welcomed him, he controls little of the anarchic country.
Even in the capital Mogadishu his grasp is tenuous. A point illustrated by the killing on Monday of 18 people in an attack on a convoy of African Union peacekeepers in the southern part of the city.