Johannesburg - South African finance minister, Trevor Manuel, said on Friday that the first wave of unemployment is being seen in Africa as many foreign direct investors scale back or shut down their operations.

He was speaking at the first-ever meeting of the "African Committee of 10", which arises from a meeting of African Finance Ministers and Central Bank Governors convened in Tunis on November 12 2008 by the three Pan-African institutions - the African Union, the African Development Bank and the UN Economic Commission for Africa.

Manuel said that increasingly, African states are encountering significant fiscal pressures as their revenue sources dry up, as expenditures rise to meet the most elementary levels of service provision and as they battle to retain expenditure levels in the face of "significantly reduced GDP growth".

"We are witnessing that the export markets developed with enormous sacrifice are suddenly closed to imports from our countries, as a result of falling consumer demand and increased protectionism," he added.

"We are living through intense liquidity pressures as our domestic banking sector battles to secure the finance to on-lend. Significant changes to financial regulation must be undertaken. Many countries are witnessing the drying up of remittance flows which have, over the past number of years, been a reliable source of finance which offsets impact to the skills drain," he noted.

Manuel also made the point that the mainstays of recent developments in sectors such as tourism are already in decline as the numbers of tourists rapidly diminish.

And he pointed out that Africa has not yet recovered from the severe impact of high food and fuel prices that the continent has lived through over the past 15 months.

"We are, however, duty-bound to raise these matters. To ask each of our Heads of State to evaluate the specific impact within their country and to advise the collective. This meeting is the beginning of such African collaboration. We offer no apologies for doing what we must," concluded Manuel.

- I-Net Bridge