Journal Issue

African finance ministers’ press conference: Leaders deeply disappointed over failed trade negotiations, call for level playing field in trade

International Monetary Fund. External Relations Dept.
Published Date:
October 2003
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In the lead-up to the IMF-World Bank Annual Meetings, Africa had much on its mind.

Nigeria’s Okonjo-Iweala pointed to the outlook for the global economy and its implications for Africa’s development, the impact of volatile commodity prices, reforms being undertaken with support from the Bretton Woods institutions, the impact of HIV/AIDS, and the concerns about the prospects for developed countries to meet the commitments they made at Monterrey and Johannesburg to enable African countries to meet the Millennium Development Goals.

But chief among the region’s concerns was the lack of progress on market access, particularly on agricultural products in developed countries. The World Trade Organization’s ministerial meeting in Cancún had offered Africa a forum in which to raise key issues, and Okonjo-Iweala noted, “We are troubled by the failure of the Cancún negotiations” and its implications for African trade and development.

Thanks to four West African countries—Benin, Burkina Faso, Chad, and Mali—the topic of cotton subsidies had been included as an explicit item on the Cancún agenda. West African cotton farmers are being pushed out of the world market, said Zambia’s Magande, by subsidies their counterparts receive in developed countries, notably the United States. The West Africans had hoped for an end to these subsidies and to be compensated for the damage done, but the meeting ended without any such commitment.

Burkina Faso’s Compaore also emphasized his disappointment and underscored the wider ramifications of the collapse of the trade negotiations. “We had intended to send a message out to the international community,” he said. For countries like Burkina Faso, where over 40 percent of the population depends on cotton, if cotton is threatened, “then the very objectives that we are all trying to achieve under the Millennium Goals are going to be jeopardized”

Namibia’s Kukuri seconded that sentiment, saying “I do believe that, through trade, a lot of the problems that African countries and Africa, as a continent, are facing could easily be addressed” If trade barriers could be removed, he believed, millions of jobs could be provided. He had no doubt that “full liberalization of world trade could lift at least 300 million people out of poverty by 2015” Of course, he added, “we welcome that a number of African countries are benefiting from special initiatives like the U.S. African Growth and Opportunity Act and that through that, opportunities for trade are expanding,” but he cautioned that such initiatives should not undermine the conclusions of a more comprehensive and sustainable trade agreement under the Doha Round of multilateral trade negotiations.

Magande called for a level playing field in the area of trade where developing countries have an interest and a competitive advantage. “We want the global trade regime to change,” he said. Referring to the Cancún breakdown, Cameroon’s Meboutou said, “We are indeed disappointed, but we haven’t lost hope” Africa would like to take this opportunity, he said, “to appeal to the goodwill of the international community so that these negotiations can resume and that account can be taken of our requests and our wishes. This is a question of equity, and this would be indeed helpful to international trade and development policies.”

Millennium Development Goals

While the collapse of the Cancún talks cast a long shadow, there was concern, too, that more needed to be done on a wide range of fronts to make progress on the Millennium Development Goals. Participants stressed the need for continuing assistance from the international community. “Our country is making efforts toward adjustment and structural reforms to help us achieve these goals,” Compaore said, “but there is still the matter of financing that needs to be settled. This is a very important issue for us, because the goals are so ambitious that if we don’t have the necessary financing to help us along our way, then the goals will be just a dream for our countries.” He welcomed the U.K. proposal, supported by France, of an international financing facility but said that implementation had to come quickly if Africa is not to “miss the boat.”

Debt relief

Slow progress on the debt front was also a concern. Many countries still labor under heavy debt burdens, Compaore said, “but even those countries that have reached the completion point under the HIPC Initiative have not yet been able to mobilize all of the resources available. The pace is rather slow, and some parties are hesitant.” Reemphasizing that their own resources were not sufficient, several ministers sought assistance from the Bretton Woods institutions in helping them release the financing necessary to attain debt sustainability while, at the same time, achieving greater growth. Okonjo-Iweala added that the particular situation of non-HIPC low-income countries that have unsustainable debt deserved the full attention of the international community.

Poverty reduction and economic growth

Reducing poverty and raising growth rates remained vital and intertwined goals for the ministers. Asked about the impact of the IMF’s Poverty Reduction and Growth Facility on living standards in Africa, Magande noted that this facility, along with the poverty reduction strategy papers that countries prepare in consultation with the people, have allowed Africans “to articulate their poverty but also some of the means by which they can come out of poverty.” These mechanisms are also helping Africa set development priorities that are going to “move our countries forward.”

NEPAD—an initiative launched by African leaders in October 2001 outlining ambitious commitments toward the region’s long-term development—calls on the region to understand that development is our responsibility but “we must understand that development is a lengthy process,” Nigeria’s Gamatie observed. Great effort is needed, and there are practical problems of implementation, particularly at the regional level. In this regard, enhancing the voices and representation of African countries in the Bretton Woods institutions is important to ensure that policies promoted by the two institutions are in the long-term interest of these countries, he said. Gamatie stressed that voice and representation would help harmonize the activities of the Bretton Woods institutions with regional trade and integration objectives of the NEPAD. Magande added, “we want our voice to be in these institution so that we can say the right things that are going to be done by these institutions to develop our countries.”

One of the key objectives of NEPAD is to ensure good governance by intensifying the fight against corruption and increasing transparency. Currently in the spotlight is transparency of transactions related to natural resource extraction. Okonjo-Iweala cited her own country, oil-rich Nigeria, as a participant in the Extractive Industries Transparency Initiative launched by U.K. Prime Minister Tony Blair in September 2002. “I think that you will see more and more countries in Africa also being more open and taking part in this initiative,” she said. At the same time, she hoped that, as African countries develop their capacity to manage their accounts with assistance from Bretton Woods institutions, international oil companies would also pledge to be equally open and transparent.

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