Monday, April 13, 2009

A commentary by the President of Liberia

The President of Liberia has released a commentary on global recession's effects on Africa. In her commentary, Ellen Johnson-Sirleaf begins by stating the great progress that Africa has made in recent years. Johnson-Sirleaf says all that progress can be undone by the recession that was not caused by Africa.

Our snippet of the commentary comes from the Guelph Mercury. Johnson-Sirleaf proposes 5 things that can help Africa keep growing through the global recession.

The economic crisis threatens the progress in my country and elsewhere on our continent. An estimated $50 billion in income could be lost in Africa during the next two years. Declining remittances, trade flows and investment could undermine new businesses, throw millions out of work, and increase tensions and instability.

The crisis, which Africa did nothing to cause, demands a strong response. African nations must do their part by continuing to address corruption, eliminate red tape and reduce obstacles to private-sector growth. But just as industrialized countries need a stimulus, African economies need a boost to keep their progress on track. The Group of 20 meeting last week produced a helpful first step. Now, five additional steps are critical.

First, the G-20 pledge to provide the International Monetary Fund with new resources must be fulfilled, and the IMF needs to get those resources to countries quickly and without onerous conditions.

Second, the World Bank and the African Development Bank must better leverage their resources; aggressively front-load support; and better target growth, jobs and safety-net programs. The International Finance Corp., the World Bank's private-sector affiliate, must be especially creative in keeping private investment on track.

Third, bilateral partners must build on their promises to increase aid and make it more effective by reducing bureaucratic delays, speeding disbursements and better aligning programs with African priorities.

Fourth, export credit agencies must use their resources to attack risk and other barriers to trade finance, such as liquidity issues.

Fifth, all countries must resist protectionist pressures so that trade can be the critical engine for restoring global growth.

The citizens and leaders of donor nations should recognize how important their assistance has been to the new leadership in Africa and how appreciative most Africans are for this partnership. Critics say that African economies are shrinking, that poverty is rising and that failing aid is the culprit.

But this argument is at least a decade out of date. Africa's turnaround is real, the evidence indisputable. Africans themselves have been the key to this reversal, but more effective aid has played an important role. Reducing aid would slow private-sector growth, stall poverty reduction, and undermine peace and stability in countries that are struggling to become part of the global economy.

No comments: