afrol News, 31 March - The President of the African Union (AU) has urged leaders to promote sustainable growth before macroeconomic stability. Political stability and democracy, on the other hand, was seen as prerequisite for economic growth in Africa.
At a conference of African economy ministers in Lilongwe, Malawi, this week, the current AU President, who is also the Malawian President, Bingu Wa Mutharika, stated that "Africa must grow first and then stabilise" - a policy directly contrary to the International Monetary Fund's (IMF) reform efforts.
Mr Mutharika explained that "what Africa needs today is not macroeconomic stability" but a "rapid and sustainable level of economic growth within a stable political and economic environment," which encompasses democratic governance, rule of law, safeguarding human rights and holding regular elections, among others.
The African Union Conference of Ministers of Economy and Finance and the UN Economic Commission for Africa (UNECA) has been held in Lilongwe in Malawi from 29 to 30 March, under the theme: "promoting high-level sustainable growth to reduce unemployment in Africa".
In his opening remarks, President Mutharika urged African ministers to take steps, as Malawi did, towards subsidising poor farmers so that they can grow enough food beyond subsistence. In this regard, he welcomed the decision made by the G8 at L'Aquila to assist Africa, not through the traditional food aid but by increasing food production capacity. This paradigm shift, he said, will "not only guarantee food security, but will also increase employment, especially in the rural communities who are generally considered as unemployable".
His praising of agricultural subsidies however is not popular with UNECA specialists, who at a recent agriculture summit in Abuja, Nigeria, presented an analysis saying Africa would gain much more from subsidising infrastructure related to agriculture rather than agricultural input itself. Also the IMF is strongly against agriculture subsidies in Africa, though accepting a fertiliser subsidy project in Malawi aimed at increasing food security there.
President Mutharika further said unemployment remains a key challenge for most African countries, despite increased growth rates witnessed over the last decade, prior to the outbreak of the financial and economic crisis. According to studies conducted by UNECA, the continent still has the highest and alarmingly vulnerable employment rates among developing regions.
Also addressing to the ministerial session, UNECA's Executive Secretary Abdoulie Janneh warned that: "Overcoming jobless growth in Africa would require strategies to increase agricultural productivity and manufacturing value-added." He expressed concern on the fact that: "we very often draw a direct link between growth and poverty reduction but sometimes overlook the direct and critical role of employment in increasing household earnings and its dynamic function in providing modern skills and contributing to increased output".
Mr Janneh concluded that "our collective exertions to promote growth and development will begin to show desired results when the vast majority of Africans are gainfully employed".
While commending the timeliness of the theme of this year's meetings, the Chairman of the African Union Commission, Jean Ping pointed out the poor degree of policy implementation as a serious impediment to the mobilisation for development and people's welfare.
Mr Ping noted that "there is no genuine dynamic for speeding up the transformation and growth of African economies, for creating new job opportunities and containing the scourge of unemployment, all of which are compounded by the undiversified nature of our national economies and, by implication, our sources of economic growth."
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