Africa worst hit by crisis

Cape Town - African countries are the worst affected by the global financial crisis, despite not having had a hand in decisions that led to the upheavals, a committee reviewing the impact of the crisis on the continent said on Friday.

African Development Bank President Donald Kaberuka said the impact of the crisis on the continent had been "seriously underestimated". He was briefing the media following a meeting of the Committee of 10 African Finance Ministers and Central Bank Governors (C10) in Cape Town.

"The fear now from the numbers we are hearing is that almost all the benefits of two decades of growth could be compromised," he said.

Crucial infrastructure projects launched as part of the United Nations' Millennium Development Goals, were now being abandoned because of the crisis.

African Union Commissioner for Economic Affairs Maxwell Mkwezalamba said the African continent had very little say in decision made by powerful institutions such as the World Trade Organisation, or the World Bank.

"If you look at the decisions taken {there}, they do have major implications on our economies and yet we are not adequately represented," he said.

Finance Minister Trevor Manuel said the meeting was an attempt to ensure closer African collaboration to bring about equity and change in global economic affairs.

He said the committee's remit was firstly, to take stock of the impact of the current recession on Africa.

"Secondly, to explore such actions derived from the observations that would inform the African heads of state and thirdly, to make a case for governance reform in the multilateral economic institutions for enhanced African participation.

"Essentially, we are charged with ensuring that the African voice in global economic affairs is amplified," Manuel said.

The global economic downturn had brought about the collapse of commodity and equity prices, huge currency volatility, the virtual inability of most firms to access trade finance and the dawn of a period when capital markets were effectively closed to all developing countries.

"We have also witnessed how the rich world has speedily moved to reflate their financial sectors, with most G7 countries now in an environment of negative real interest rates - the United Kingdom, for example, now has interest rates at the lowest level in the 314 year history of the Bank of England, while we remain trapped in poverty," Manuel said.

- Sapa