From Africa Recovery, Vol.13#2-3 (September 1999), page 19 (box within article "Finance for development")

Africa must focus on poverty reduction, ministers declare

Most African countries lack the basic structures to reach and sustain the 7 per cent annual growth rate required to halve poverty by 2015. Therefore Africa's Ministers of Finance, Economic Development and Planning decided in Addis Ababa that, among other things, African countries must:

-- focus their development efforts on poverty reduction;

-- fight corruption and stem and reverse capital flight;

-- move faster to develop human capital and build the institutions and infrastructure needed for sustainable growth;

-- modernize and adapt their productive, regulatory and administrative structures to meet the challenges of globalization and liberalization;

-- boost exports and improve the investment and trade environment in order to sustain the fragile economic recovery;

-- integrate into core planning measures to counter the HIV/AIDS epidemic;

-- review the content and duration of adjustment programmes while deepening economic reforms;

-- increase domestic resource mobilization, especially by raising the informal sector's contribution to savings;

-- identify and exploit opportunities to improve the productivity of public spending;

-- support capital market development at domestic and sub-regional levels.

On debt, African ministers welcomed a "new international realism... that much of the debt is unpayable, and that current debt resolution mechanisms, particularly the HIPC initiative, are far too slow, far too selective in coverage, and far too [conditional]." Current developments are "in line" with the recommendations they made in 1997, the ministers noted with satisfaction. Their new proposals were forwarded to the Cologne summit of the Group of Seven major creditor countries and were largely endorsed. But some elements were not, namely the call for "exceptional debt relief for post-conflict countries, particularly those with protracted arrears." The ministers said other countries adversely affected by conflict situations and by serious natural disasters should also receive exceptional treatment that "should also include the cancellation of debts."

African ministers noted the idea of referring debt sustainability analysis to an independent body composed of eminent persons conversant with financial, social and development problems and jointly selected by creditors and debtors, with creditors committing themselves to considering cancellation of debt that is deemed unpayable.

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