June 9, 2004

Africa's economic dependence to continue, predicts UN-report

The United Nations' Economic and Social Council has said sub-Saharan countries will remain commodity dependent as long as they are subjected to secular terms-of-trade losses and volatile foreign exchange earnings. According to a report of March 2004, this situation severely constrains effective macro-economic management and stunts capital formation, hampering efforts to diversify into more productive activities which add to the debt overhang. It says sub-Saharan countries had remained commodity dependent despite implementing programmes such as the Structural Adjustment Programme (SAP). The report suggests a three-pronged approach that would ease this situation and see sub-Sahara's trade grow with the rest of the world.

These are tapping of emerging markets, increasing intra-Africa trade and strengthening institutional capacity with the help of better international financing schemes and balanced trade. It says efforts were being made to address these problems through the Joint Integrated Technical Assistance Programme (JITAP) to selected Least Developed Countries (LDCs) to enhance their participation in international trade. It says 16 countries are part of this project and Zambia is one of them with Tanzania, Kenya, Malawi, Botswana, Burkina Faso, Cameroun and Ghana also in the group. The organisation also helped these countries to prepare for the Cancun conference to highlight issues of non-access to agricultural markets and pledges to the JITAP trust fund to date amounting to U$11.7 million, representing 92 per cent of the total project. The report says the International Monetary Fund (IMF) has called for removal of subsidies on agriculture and trade liberalisation. "The IMF continues to advocate in various forums greater access to industrial country markets for Africa, including in particular the elimination of agricultural subsidies in industrialised countries," the report said. (The Times of Zambia, Ndola)


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