Business News Wed, 26 Sep 2007

Africa needs economic think-tank

Accra, Sept. 26, GNA - Dr. Nii Moi Thompson, an Economic Consultant on Wednesday called for the establishment of a Continental Research Organisation that should be a Think-Tank to analyse, monitor and evaluate international economic policies that affected African countries.

He said experience had shown that the success of an economic policy in an African country could not be applicable to another country for the achievement of the same result.

"Africa has peculiar economic, cultural and historical environment and that its development paradigm is far different from that of all the European countries; in that Africa had never owned slaves nor established an empire."

Dr Nii Moi was speaking at the launching of an UNCTAD 2007 Report on Economic Development in Africa, dubbed Reclaiming Policy Space Domestic Resource Mobilization and Developmental States. He said resource mobilization should come from within African countries and that they ought to develop and maintain their human resource a level that they would have the capacity to analyze, for instance, claims of international economic situations as it related to Africa.

It was not enough for an ambassador to say at a press conference that his country had given so much to an African country without the journalists going behind to find out what the money was used for and whether it was true that such an amount of money was given by the donor at all," he said.


He said intra-trade among African countries was only about 8 percent of 52 percent of Africa's international trade. There has been international concern over developing modules as to what extent it would be expedient for state intervention in the domestic management of the economy and the operations of the private sector. Times were when the Bretton Woods Institutions prescribed a model for developing countries and at another time there was a paradigm shift on their approach to developing countries.

In some instances the foreign institutions prescribed economy measures to some countries which when they adopted led to the sale out of some companies which their cronies turned round to buy. Prof.Goerge Gyan-Baffour, Deputy Minister of Finance and Economic Planning in launching the report said, "There is a growing concern that, over the last quarter of the century, the "Policy Space'' available for the developing countries has shrunk so much so that their ability to achieve economic development is being threatened. "While the ''Policy Space'' has been constrained to a large extent because of the insufficient resources, the government has over the years resisted the construction of the Policy Space. Prof.Gyan-Baffour said those things were achieved through the creation of relevant necessary institutions and structures to enhance the effective and efficient use of domestic financial resource in the wake of dwindling of official development assistance [ODA]. The government also created a sound business environment for a private sector led growth and a stable exchange rate regime manageable inflation for predictability of investment decisions and reduction in interest rate to reduce cost of capital. Dr.Yao Graham,Cordinator of Third World Network expressing his opinion on civil society on the report said there the need to balance the inflow from the informal sector of the economy against that of formal sector. He said the larger part of the population lived in the rural areas and formed the greater majority of the informal who were faced with poverty.

He said credit to the informal sector should be structured in a way that domestic resource mobilisation could match investment required for development. The report which covered four chapters and dealt with topics like domestic resources, increasing savings and barriers to investment in Africa in an introductory remarks said' One of the most prominent objectives of the Millennium Development Goals[MDGs] adopted at the United Nations Millennium Summit in 2000 was to have member states halve their levels of absolute poverty by 2015.'' It said, "While some regions of the developing world have made sufficient progress towards achieving this goal, sub-Saharan Africa has been singled out as one region that is unlikely to meet the target by 2015 if current trends continue.

Indeed, halfway through to the target year, the latest data on poverty shows that sub-Saharan Africa is the only developing region where the absolute number of poor people has been steadily increasing, even if the relative number decline from 47 percent to 41 percent of the total population between 1999 and 2004[Chen and Ravaillon,2007].'' One of the reasons why sub-Saharan Africa might miss the 2015 target is its relatively low rate of economic growth. Indeed, despite the recent gains made by a number of countries in terms of export revenue, thanks to high prices of some major primary commodities, the growth rate in sub-Saharan Africa as a region continues to fall short of the 7-8 percent necessary to achieve the MDGs target. 26 Sept. 07

Source: GNA