African ministers yesterday cautioned that although there has been good progress at this weekend's meetings towards achieving debt relief, focus on relief for Iraq and the HIPCs could come at the expense of medium-income countries on the continent.
They said there is now complete consensus that debt relief must be provided, citing positive conversations with Fund Managing Director Rodrigo Rato, Bank President James Wolfensohn and the meetings of the Development and International Monetary and Financial Committees. They also welcomed specific moves on debt relief by Treasury Secretary John Snow and UK Chancellor of the Exchequer Gordon Brown.
Goodall Gondwe, minister of finance for Malawi, noted that improvements in monetary and financial policies and greater macroeconomic stability in the continent had produced better growth rates, but added that Africa would need to start growing at more than 6% to make significant inroads on poverty reduction. He added that without debt relief, countries would find it hard to meet the Millennium Development Goals.
Per capita incomes in the region could rise by over 2% of GDP in 2004-05, marking the fastest growth in a decade, according to Abdoulaye Bio Tchane, director of the IMF's African department. At the same time, inflation is moderating. The gains are particularly large in oil-producing countries, but non-oil producers are also experiencing solid rates of economic growth. The Fund is expecting growth of 4.7% in 2004 and 5.7% for next year for the whole continent, he said. But the picture is highly mixed. While some countries have sustained high rates of growth for a prolonged period of time ? more than 10 years for some of them ? leading to a reduction in poverty, others have faced lingering armed conflicts, natural disasters and weak governance. Furthermore, continued income inequality means that in certain cases countries that achieved rapid growth rates have not managed significant levels of poverty reduction