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Africa urges rich nations to decisively tackle crisis

Published 04/25/2009, 04:24 PM
Updated 04/25/2009, 04:40 PM

WASHINGTON, April 25 (Reuters) - African finance ministers on Saturday called on rich nations to take decisive measures to tackle the global crisis, amid worries some countries in the continent could find themselves saddled with big debts.

A group of ministers told reporters on the sidelines of the International Monetary Fund/World Bank spring meetings that the worst financial and economic crisis in decades threatened to reverse hard won fiscal gains on the continent and increase poverty as jobs disappeared.

"We urge the rich countries to take definitive action to ensure that this crisis is as short as possible. This crisis did not start from us (Africa). It started here," said Zambian Finance Minister Situmbeko Musokotwane.

Sharp declines in exports and commodity prices have severely dented the revenues of African countries. The IMF has forecast growth in sub-Saharan Africa would slow to 1.5 percent this year from 5.5 percent in 2008.

African countries, which have made great strides in cutting their debt to manageable levels in the past 10 years, are experiencing a decline in foreign direct investment and outflows of capital, leading to sharp currency depreciations.

Countries like Zambia have seen their import cover dwindling to two months from about 3.8 months and its ability to service its foreign debt has been impacted, Musokotwane said.

Most countries in the world's poorest continent face a similar predicament, prompting Tanzania's finance minister Mustafa Mkulo to urge developed nations to honor their pledges to provide additional resources to Africa and the IMF.

"Rich countries should do more to assist developing countries because the crisis came at a time when African countries were restructuring. They must honor their pledge to poor countries and the international finance institutions," Mkulo said.

On Friday, the IMF's African Department director Antoinette Sayeh said African countries will need at least a doubling of aid promised by the Group of Eight heads of state at the Gleneagles Summit in 2005. That summit pledged to double aid to $85 per person by 2010.

There are concerns that some of the wealthy countries might not honor their promise because they have to commit huge resources toward stimulating their own faltering economies.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

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