AFRICA: Development Requires Billions in Aid, Says UN

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Sep 12 2001 (IPS) - Africa needs a considerable boost in external financing, at least over the course of one decade, to accelerate the continent’s economic growth, says Rubens Ricupero, secretary-general of the United Nations Conference on Trade and Development (UNCTAD).

The “Economic Development in Africa” report, which UNCTAD released Tuesday, calculates that an additional 10 billion dollars are needed annually if the region is to reduce its dependence on foreign aid in the future.

“That is, if we wish to reduce dependence on aid (in the long term), we have to start by increasing aid flows at this moment,” stressed Ricupero as he presented the report in Geneva.

There is little possibility in the short or medium term that other sources, like foreign direct investment or trade, will replace the need for official aid, he said.

UNCTAD’s chief economist, Yilmaz Akyuz, commented that the transfer of resources is an essential part of efforts towards African development.

Such resources include official direct assistance, debt and trade, particularly the terms of trade (the relation of export prices to import prices), said the Turkish expert.

“If we put these three things together, Africans really have not been receiving net resources from the rest of the world – and African marginalization has a lot to do with this fact,” stated Akyuz.

UNCTAD chief Ricupero said, in reference to the need to boost financial flows to the continent, that African countries have recently begun to take responsibility into their own hands and are proposing solutions to this problem.

A meeting of the region’s national leaders, held last July in Zambia, served to institutionalise African unity, but also to establish priorities for African development.

This united stance demands a response from external financial sources, said Ricupero.

On the trade front, the UN agency calls for an increase of the African nations’ presence in world markets.

“African countries face very significant market barriers both in terms of exports to industrial countries and in terms of unfair competition arising from subsidies to the agriculture sector,” said the secretary-general.

The calculations of the additional external resources needed for African development take into account the losses related to terms of trade within the existing international trade system.

Akyuz reported that the World Bank and the UN Economic Commission for Africa coincided with the figure of 10 billion dollars annually estimated by UNCTAD.

The economist stressed that Africa’s development depends on implementing policies to fight poverty, which require more rapid growth and a more equitable income distribution.

But “if structure and macroeconomic policies do not achieve faster growth and if they distort income distribution at the expense of the poor, how are we going to regulate poverty?” said Akyuz.