African countries on Saturday said they had the right to seek assistance from the Bretton Woods institutions in order to cushion the impact of the current global financial meltdown.
The finance ministers of Zambia, Tanzania and Cote d’Ivore who spoke on behalf of the continent during the ongoing World Bank/International Monetary Fund meetings in Washington DC, noted that the assistance was non-negotiable as they did not cause the global financial crisis.
They spoke against the backdrop of allegations that African countries were not doing anything to improve their economies.
The ministers said many countries on the continent had embarked on far-reaching reforms that transformed their economies for good and reduced poverty rate to bearable limits in the last decade, noting however that the current meltdown had almost reversed all recorded gains.
Finance Minister of Cote D‘Ivoire, Mr. Charles Koffi, specifically said, ”The crisis did not come from us. We are the victims. The crisis created some disturbance in our economies and constituted a drain on our resources. We are also a part of these institutions, so, we have the right to ask them to extend finance to us.”
He, however, said African countries were not just waiting on the institutions but were committed to implementing reforms aimed at managing public finances to create confidence in their economies.
His Tanzania‘s counterpart, Mr. Mustafa Mkulo, noted that his country was enjoying robust growth until the external financial crisis set in.
”If not for the global economic crisis, Tanzania was doing well with a sustainable seven per cent growth rate for years until six months ago, when the crisis began to reverse that. If this happened without us causing it, and deterred our growth, then we need to get more funds from these Bretton Woods institutions.
Nigeria had also recorded a remarkable macro-economic improvement with real Gross Domestic Product growth rate averaging about 6.4 per cent in 2007. The IMF currently predicts a 2.9 per cent growth rate for the economy in 2009, a 2.4 per cent decline from 5.3 per cent growth rate achieved in 2008.
Sub-Saharan Africa is expected to grow at an even slower pace of 1.5 per cent this year, according to the IMF.
According to Mkulo, the crisis being faced by African countries is global in nature and will require global solutions.
Finance Minister of Zambia, Dr. Situmbeko Musokotwane, said, ”The fact that the crisis has come, which we did not cause is unfortunate. If we ask for financing, there is nothing wrong with it. The deficit incurred in the United States, close to $2tn, will not come from the US. If it is in order for a country as robust as the US to ask for financing, what is wrong with African countries asking for the same?
The ministers, however, noted that they had learnt from the debt mistakes of the 70s and 80s and would guard against new debt traps.
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