Meles Zenawi hails G20 progress
By William Wallis, Africa Editor | April 3, 2009

Meles Zenawi LONDON - On paper at least, African leaders appear to have emerged from the G20 summit with most of what they wanted.

Meles Zenawi, the Ethiopian prime minister, who is officially representing the continent, had urged the International Monetary Fund to sell part of its gold reserves to finance a $50bn (€37bn, £34bn) rescue package for low-income countries. The summit approved the plan.

Poor countries should also benefit from a $250bn increase in the IMF’s special drawing rights, the fund’s reserve currency, about 7 per cent of which could accrue to Africa.

“I think we made a very surprising level of progress,” Mr Meles told the Financial Times.

“The issue now is timing. We need to make sure the resources begin flowing by the third quarter of this year.” He added that new resources would not be tied up with the kind of conditions that have often prevented African countries from gaining access to financing in the past.

In parallel on Thursday the International Finance Corporation, the World Bank’s private sector lending arm, announced it was putting $1bn towards a new $5bn fund to unblock trade finance for the developing world.

Trade credits to Africa have all but dried up in recent months, contributing to a sharp economic downturn across the continent.

In Africa the slump has lagged behind other parts of the world more directly affected by the banking crisis, but it is now putting the brakes on what was one of the longest periods of economic expansion in the continent’s history.

Thursday’s meeting also delivered a re-affirmation of prior commitments by rich nations to increase bilateral aid to low-income countries to reduce poverty and support development goals.

African governments and aid activists were more sceptical. Although some rich nations have gone a long way towards fulfilling pledges to increase aid, some are slashing it. Overall, acc­ording to Donald Kaberuka, president of the African Development Bank (AfDB), core development funding to Africa has been declining by 4 per cent a year.

Mr Meles said Africa’s voice had been heard partly thanks to the willingness of Gordon Brown, the British prime minister, to allow him and other African representatives to participate in preparations for the summit.

Bob Geldof, the aid campaigner, also welcomed the outcome. “The key point for the 50 per cent of the planet who live on less than two dollars a day must be that they have finally been brought in from the margins to the centre of the decision-making process,” he said.

He added that it was now critical to find out whether new money would come in the form of grants or loans.

Additional reporting by Tom Burgis - An African-American news and views website.
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