Africa and the global economic down turn

It is said that once a king’s palace starts complaining about food scarcity, the king’s royal followers are already forcing their young ones to sleep on an empty stomach. The global economic down turn may reflect this on Africa. The world’s bigger economies have cried foul. How about those that depend on them? I don’t actually want to provoke the opinion of the best debaters or provoking new philosophies about the current global economic trend but I wish that we put our minds together as Africans and forge if we can’t find solutions to the economic crisis the world is now facing. I wish to recognize that most if not all African countries depend on foreign Aid to facilitate their budgets and which aid comes from countries that have been hit hard by the current economic down turn. Some African countries can not even facilitate 30% of their national budgets. Even the so called rich do not entirely facilitate their own budgets. So the question remains; where is Africa’s fortune in this crisis? Recently the President of the republic of Tanzania and the former chairman of the African union with other African leaders held a meeting with the International Monetary fund in the Tanzanian capital of Da-are-salam. The purpose of the meeting was to draw a mechanism that would assist African countries not to be harmed by the current world economic recession. The IMF is a world body whose purpose is to ensure the world enjoys economic stability but since it was created in 1944 it has failed to realize its obligation due to reasons that we shall see in the subsequent discussion. The Tanzanian President Mr. Jakaya Kikwete in his address requested the IMF to open its doors to African countries that may wish to go their way. I am sure the IMF will not close its doors for them. They will be most welcome. But I am also sure that most of them will regret having gone there. I am not discouraging any body from going there because we indeed need the assistance but we need to go there well knowing that the strings the IMF attach on its assistance may do more harm to the borrowing country than the good the borrowed money is purposed for. IMF’s conditions are sometimes meant to fail the state and subsequently force it to succumb to its ideology which may in turn have adverse political effects on their governments. To Africa however, foreign aid is a necessary evil since it is a source of livelihood to many of its inhabitants. Many Africans are employed by projects financed by World Bank, Christian relief organizations, European Union and aid provided by other international agencies. Africa therefore desperately needs this aid in order to control issues like unemployment and inflation especially during this time when the world is facing economic hardships. I have read about the great depression of the 1930s that enveloped the whole world and caused adverse effects on the world economies causing unprecedented level of unemployment especially in the United Sates with about a quarter of its of its population affected. The story arouses my fear that the current crisis may result in situations like those of the great depression which may have dire consequences on our continent. So far statistics show that about 4 million Americans are unemployed. The current American government under President Barack Obama is working hard to liquidate American companies that are on the verge of collapse in order to control the problem of unemployment and the consequences it can cause to America and its citizens. I wonder whether there is an African country that has the capacity to bail out its private sector unless it is helped by the world’s biggest financial powers. But how could this happen when those countries are also facing an economic down turn? What Africa requires is to convince the western world to open up markets for African goods especially agricultural products, increase the level of tax collection, fight corruption and pray hard that foreign aid is not reduced. African countries must be conscious with regard to the fact removal of trade barriers, monopolies and tax distortions may enhance long run growth but may disturb the country’s economy and deepen its down turn. They must understand what is happening now and also be concerned about what may happen if tax revenues or foreign assistance should fall and design policies that will help them deal with such challenges. Contact: Phatari@yahoo.co.uk