The APP Bulletin

Is Africa ready to seize the opportunities generated by climate change?

Most people agree that economic growth depends upon a vibrant private sector. But when it comes to Africa, there remains a degree of schizophrenia about the role of business.

Positive trends over the last decade are being severely challenged in Africa. Economic contraction is affecting growth and poverty reduction, investment and aid levels. But there are worrisome signs on the political front too.

What do LDCs need in order to mitigate the worst impact on their economies and people of the global meltdown, one that has “made in the north” stamped all over it?

Overshadowed by the media coverage of the G20 Summit, the OECD has released its annual figures on net ODA as provided by its 22 country Development Assistance Committee (DAC).

Gordon Brown’s Africa credentials are strong, and the UK is one of the few G8 countries that is sticking to its aid promises. But with so many other priorities on the G20 agenda, and western politicians focused on domestic issues, there is a real danger that the G20 leaders’ ´meeting will result in more lofty rhetoric rather than time bound plans.

The proliferation of Gs is bewildering, but in fact may be a sign of health, as the world struggles to find governance structures which are both effective in terms of economic clout and have the political legitimacy to tackle the multiple crises before us.

China evidently sees Africa as part of its own economic stimulus plan. China is already Africa’s second biggest trading partner: $106 billion in 2008, up from $10 billion in 2000, according to its Ministry of Commerce. Do western countries see Africa the same way?

There’s been a burst of political activity in the last couple of weeks. Morgan Tsvangirai agreed to join a government of national unity with Robert Mugabe, despite the MDC not getting the Home Affairs portfolio. Sheikh Sharif has been
voted in as new President of Somalia. And a deal has been struck between DRC President Kabila and Rwanda’s President Kagame in the eastern Congo.

The inauguration of a half African US President is a source of joy Expectations in some quarters are sky high, but it may take some time before domestic priorities allow Barack Obama to focus on Africa. In the meantime, Africa can take pride in his success.

2008 does not close on an upbeat note for Africa. Five plus years of strong growth risks being derailed by the impact of the global economic crisis, contraction in demand for commodities, reduced trade and investment levels. Improvements in governance performance in 31 out of 48 countries, as assessed by the Ibrahim Index, are being overshadowed by conflicts and humanitarian tragedies, including in the Central African Republic, Congo, Cote d’Ivoire, DRC, Eritrea, Ethiopia, Niger, Somalia, Sudan and Zimbabwe.

It was important that it happened – but was what happened important? The Doha Conference on Financing for Development took place in uncertain times, at the tail end of one US Administration, as the global economic crisis reached new depths, and Mumbai was under assault. It coincided with the Thanksgiving weekend, thereby explaining, it was said, Robert Zoellick’s if not Dominique Strauss‐Kahn’s much‐remarked absence.

One clear message has emerged from recent high level meetings, including the Tunis meeting of African Ministers and Central Bank Governors and the G20 meeting in Washington. Honouring official aid commitments by rich countries is critical, and the global economic crisis is not the time to relax or scale them back. But sometimes, the logic behind this message gets lost.

The election of Barrack Obama is generating great hopes in Africa and among those pressing for maintenance and even increase of development assistance by rich countries to Africa. However, as in other G8 and OECD countries, the domestic economy is his top priority. Notwithstanding our own and others, efforts, it may be some time before the Obama administration feels able to match the increases in assistance to Africa overseen by its predecessor. The prospect is of low cost development initiatives – rationalization of US development architecture, for example.