Microcredit – A Solution for Africa?


Following the second Microcredit Summit, African Advocacy Forum II was organized on November 14, 2002, by the Office of the Special Coordinator for Africa and the LDCs (OSCAL), in collaboration with the Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, and the Graduate Center of the City University of New York.


 The forum was co-chaired by Mr. Anwarul K. Chowdhury, Under-Secretary-General and High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, and H.E. Matia Mulumba Kamakula Kiwanuka, Permanent Representative of Uganda to the United Nations. The co-chairs were introduced by Mr. Ejeviome Eloho Otobo, on behalf of Ms.Yvette Stevens, Special Coordinator of OSCAL.


Africa Advocacy Forum II benefited from the high-level participation of Mrs. Isatou Njie Saidy, the Vice President of the Gambia, Mrs. Hajiya Aisha M.S.Ismail, the Minister of Women Affairs and Youth Development of Nigeria, and former first lady of Ghana, Mrs. Nana Agyeman-Rawlings. Mr. Sam Daley-Harris, the Executive Director of Microcredit Summit organization, representatives UN organizations, NGOs and Academia, Young Professionals Association, as well as African practitioners who attended the Microcredit Summit+5 also attended.  Representatives from the Missions of Japan and Finland to the United Nations participated to the Forum.


Participants put micro finance issue into a global context by acknowledging the critical role of microfinance in mobilizing resources for the implementation of NEPAD, by highlighting the importance given to microfinance, as a tool for poverty eradication, in General Assembly resolution 52/194 of December 1997; the Monterey Conference on Financing for Development (March 2002) and by recalling the ECOSOC resolution 1998/28 that dedicated year 2005 as an international year of microfinance.  To the question Microcredit – A Solution for Africa?  They responded, YES, a solution but not the Solution.


Consensus emerged that successful microfinance operations relied upon the existence of enabling environment, consisting of efficient and adequate infrastructures; health related schemes, among other things insurance mechanisms; adequate regulatory framework; sound macro-economic environment and financial stability, and a greater involvement of civil society.   


The informal economy, which represents more than half of the African economies, should be put at the heart of the development process in the region. As far as the outreach of microfinance is concerned, it was also mentioned that youth, women, poorest of the poor, and rural population had not received enough attention and focus.


The forum recommended that the microfinance operations should capitalize on the existing African knowledge and practises while learning from other countries’ experiences. In the same vein, there was a suggestion to create a unified front of African microfinance institutions, researchers, trainers and financial supporters to network at the Micro credit Summit and other international fora to support African practitioners.  Impact assessment was pointed out as an important tool to assess the progress made in reaching the goals of microfinance.