NAIROBI, Kenya, March 8 – The government says Kenya will prioritise trade and investment as part of its economic recovery plan after the global meltdown.
At a forum where the International Monetary Fund engaged Kenyan leaders on economic matters and the effects of the global recession, it was noted that Africa’s recovery was so far commendable but more needed to be done.
Prime Minister Raila Odinga who spoke at the forum on Monday said external financial aid should be directed towards improving infrastructure to enable the country and the continent remain independent.
He said time had come for the continent to start relying on its resources and increase its sovereignty.
“We are trying to open up our economies through massive investment in infrastructure but our economies are still too weak to attract financing from the international financial market which is why we need aid. But ultimately, it is more trade and the access of our goods to the international market which is very crucial,” he said.
Finance Minister Uhuru Kenyatta on his part said African governments should change focus from the west and explore possible inter-trade relations. He emphasised the opening up of regional markets as a means of boosting the continent’s economic strength.
“We need to looking at ourselves and comparing ourselves with being giants where real giants play and that’s not going to happen unless we focus ourselves on regional integration. With regional integration it means a great deal more emphasis on regional infrastructure. The trade must not only be trade with the developed countries but trade with ourselves- within the African context,” he said.
IMF Managing Director Dominique Strauss-Kahn however challenged African governments to look within as opposed to reaching out to donors. He said poverty had flourished because African countries had for long been reduced to fixing disasters.
“I’m afraid that what we have been doing so far was just not enough; just coping with the immediate problem and looking forward to reaching the level of middle income economies is perfectly normal. But we need to look further and it won’t happen by relying solely on foreign aid,” he said.
The IMF chief who lauded Africa for coping through the challenges of the global recession however warned that the continent might not be able to recover from the effects posed by climate change. He said the threat posed by climatic changes was so great that the continent needed to put in place measures to cushion it from the effects.
“Certainly it is not the time to rest. Africa remains highly vulnerable to economic dislocation. Africa will continue to face large, consistent and costly shocks and those shocks have not only to do with economic stability. I speak to you this morning with a sense of urgency; unfortunately climate change will hit developing incomes soonest and hardest and we need urgent action,” he said.
The Finance Minister also added that subsidies given by international trading partners were a hindrance to trade for African countries as they promoted unfair competition. He asked the international community to promote the development of free and open trade saying it would provide an equal playing ground for developing countries.
“We have suffered as a continent not so much as a result of the subsidies that we give because we cannot afford subsidies. But I think Africa has suffered as a result of the subsidies that developed countries give their own farmers; cotton farmers and sugar farmers. If we were allowed to compete in a completely free world I honestly believe that Kenya and Africa do not need aid but we can actually stand on our own two feet,” he said.
Mr Kahn also explained that the IMF would keep in check business between China and African countries saying to ensure the super power did not take advantage of the developing African countries.
“It is very useful that a country having a lot of resources may help Africa. The only problem is that the deals between China and African countries have to be fair deals. When you are small and are dealing with a big animal then you have to have a long spoon and try to look at what is really at stake,” he said.
Mr Kenyatta also asked African countries to develop their human capacities saying that other than mineral resources, Africa’s human capacity was their greatest asset.
“Our ability to merge our mineral resources and the human capacity with the opportunities that we have prevail upon on our people- especially the young to take advantage of the networks that have been built to be able to deal with the rest of the world. We need to take advantage of these opportunities,” he said.
Other issues that were discussed at the forum were tribalism and ethnicity and corruption.
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