Tuesday, June 17, 2008

G8 report says rich nations are failing Africa

A new G8 sponsored report issues a damning indictment of the world’s richest countries saying they are falling short on aid commitments to Africa. The Africa Progress Panel says the first world is falling seriously behind in its commitment to help the continent meet it challenge to escape poverty and debt. The aid problem is exacerbated by rising food prices and the impact of global warming. The report suggested innovative ways to meet the aid shortfall and called for immediate assistance in food production, an end to trade barriers, and a drastic increase in African infrastructure projects.

The report entitled Africa's Development: Promises and Prospects (pdf) cites four different but interlocking crises that dominate the global economy. They are the financial crisis in the West, a worsening energy crisis, the threat of global warming, and high food prices which are affecting the world’s poorest people. While it says the world has missed “early opportunities” to deal with the first two crises, it believes it is imperative “we meet the challenge of the third and take immediate steps to address the fourth”.

The Panel has drawn on the work of various institutions and eminent individuals working on African issues to present an independent assessment of progress. The report focuses on the twin challenges of food crisis and global warming. Many countries are undergoing a reversal of decades of economic growth and 100 million people are being pushed back into poverty. Export bans on key commodities such as rice are adding to the problem. The report issues a dire warning that unless a way can be found to reverse the current trend in food prices there will be a “significant increase in hunger, malnutrition, and infant and child mortality”.

The report calls on developed nations to raise the level of financial assistance to affected countries and aid agencies. It also calls on the rich nations to review economic and financial policies to ensure the production of food is not threatened. In the longer term, the report advocates “substantial new investments raise agricultural productivity and food production” in Africa and the wider world. The report also calls for a review of trade policies concerning biofuel subsidies, grain storage and the need to kick-start fertiliser markets. Africa needs fairer access to protected world markets but multi-lateral trade negotiations have been stalled since the Doha round were deadlocked in 2006. It also pleads for prioritising rural development and giving the poor access to world markets. But it warns that “the delivery of promises on aid for trade must not be held hostage to trade deals”.

The report follows other NGO warnings that Africa is ill-prepared for climate change and will bear the brunt of any negative impact. Climate change will further diminish the means of food production and will play havoc with the lives of the global poor. Already disadvantaged by high food prices, the urban poor in particular will suffer greatly if there is any further loss of agricultural productivity due to climate change. The report recommends increased funding for renewable energy noting solar, wind and geothermal production is “very viable” in Africa. It also lauds a Forest Carbon Partnership Facility to prevent the disappearance of tropical rainforests. The plan involves estimating nation’s forest carbon stocks for emissions estimates and providing financial incentives to reduce emissions below a defined threshold.

Investments in infrastructure are also needed to achieve lasting solutions to the food crisis. Africa requires roads, power and water so that farmers to produce and distribute food. Infrastructure projects will also generate economic growth, jobs and income and will help create a productive private sector currently missing in many African countries. 60 per cent of all enterprises fail to thrive due to lack of basic electricity due to a poor national grid or numerous power outages. The report recommends hydroelectric projects such as Congo’s Grand Inga Dam as having the potential to meet a significant share of the continent’s power needs. Poor roads are also a problem with only 12 percent of Africa’s roads paved and 10 percent of all road deaths worldwide occurring in Sub Saharan countries. The report calls for a Trans-African road network (pdf) linking Dakar, Lagos, Khartoum, Luanda, Mombasa, Windhoek and Gaborone.

The Africa progress panel was an initiative of the 2005 G8 summit at Gleneagles, Scotland. The eleven member Panel members has several high profile members including chair Kofi Annan, Tony Blair, Bob Geldof, former International Monetary Fund chief Michel Camdessus, and Nobel Peace Prize Winner and Grameen Bank founder Muhammad Yunus. The Gleneagles Summit pledged large funds towards debt cancellation and the achievement of the Millennium Development Goals. But the G8 has been slow to match these pledges with action. It has had success with debt relief but has not yet produced a timetable to progress to the much vaunted goal of doubling aid. The G8 promised $130 billion in aid by 2010 but is likely to fall short by $40 billion.

The report acknowledges that traditional budgetary resources are unlikely to address this shortfall. It suggests innovative new sources of funds such as currency transactions taxes, carbon taxes, taxes on international
air travel and freight transport, a global lottery, and measures to increase private funding of development agencies, Annan and his team say urgent collective work needs to be a priority for the donor community to evaluate these and other options. Africa, they say, is at a critical juncture. It pleads with the G8 to renew its 2002 Canadian Kananaskis Summit goal that no countries genuinely committed to poverty reduction, good governance and economic reform, will be denied the chance to achieve their Millennium Goals through lack of finance. Kofi Annan’s introduction put it best: “the world has a stake in realising the African continent's huge potential to thrive."

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