July 31, 2002
African finance ministers Wednesday urged the International Monetary Fund (IMF) and the World Bank to review reform packages for Africa, saying "they have had little impact on the continent."
"African countries have in the last several years implemented strong macro-economic policies and structural reforms, but some of these reforms have not yet benefited our countries in general," the ministers said in a memorandum to be presented to the two Bretton-Woods institutions.
"Some of the reforms, like the privatisation of public enterprises, were not giving the envisaged results and they were being rushed onto the continent, " they said at the first meeting of a three-day Caucus of African Finance Ministers and Governors of Central Banks.
The ministers cited such reforms as a reduction of the fiscal deficit and external tariffs and the liberalisation of domestic trade.
"But these had failed to elicit sufficient supply response to mitigate some of the negative social impacts of the reforms," they said in the draft memorandum ahead of their annual meetings with the IMF and the World Bank in September.
The ministers are also expected to discuss debt sustainability, enhancement of sources of economic growth on the continent, as well as striking parity between developed and developing countries, by addressing issues of market access and agricultural subsidies in industrial countries, to forge a common stand ahead of the September talks.
"Despite significant progress made in trade liberalisation, Africa still faces considerable problems in becoming a full partner in global trade," the memorandum said.
It cited non-tariff barriers imposed by developed countries on products in which Africa has a comparative advantage as a major impediment to the continent's development.
"Africa is calling for more flexibility by lenders and an end to market subsidies by western governments," the memorandum said.
It noted that the recent preferential market access initiatives such as the US market duty-free under the African Growth and Opportunity Act (AGOA) and Europe's "Everything But Arms" schemes were steps in the right direction.
"However, the conditionalities on them were too demanding and will limit the number of beneficiary countries," the memorandum said, adding that the recent sharp increase in US farm subsidies undermined any likely benefits for Africa from the AGOA.
"Africa proposes a revision of the IMF and World Bank packages, which do not conform with micro-management of our countries and promote partnership and ownership," the memorandum urged.
Kenyan Planning Minister Adhu Awiti charged that the conditions attached to the disbursement of aid were sometimes too demanding and slowed down the absorption of resources.
Awiti said concessionary lending for programmes aimed at fighting the HIV/AIDS pandemic were welcome, but warned that "failure to extend grants for such activities would lead to unsustainable debt in recipient countries, undermining the goals of the HIPC initiative."
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