Daily reports from activists school on “The Global Financial and Economic crises and Africa”
Opening the discussions, Gyekye Tanoh of TWN-
Edward Kareweh, deputy general secretary of the General Agricultural Workers' Union (GAWU) of the Ghana Trade Unions Congress., shed some light on the extent to which ECOWAS’ position had worsened by 2007. He explained that there were three elements leading to the deterioration: the first was the role of Nigeria and how it had said no to the EPAs; secondly, the role of Ghana in initialing the interim EPA, and how that was an entry point for Europe to get to the rest of Anglophone Africa; and finally, Cote d’Ivoire, which had actually signed an interim EPA. In his view, these three major points had all contributed to a general breakdown of ECOWAS’ position on the EPAs.
To shore up ECOWAS’ position, Ibrahim Akalbila of the Ghana Trades and Livelihood Coalition (GTLC) called on Ghana to negotiate as part of the sub-
Head of Programmes of TWN-
Suggestions from other participants included the establishment of a dedicated press corps on the EPAs, with a specific proposal for the Institute of Financial and Economic Journalists (IFEJ) taking the lead on this group. Another proposal, by CIVIC Response, was for a more long-
Closing the meeting, Programme Officer of TWN-
The EPA is a trade pact that is being negotiated between ECOWAS and the European Union (EU). The objective of the workshop was two-
The EJN is a coalition of Ghanaian civil society organisations fighting for economic justice. TWN-
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DAY 1, August 23, 2010
He said these crises have also, more poignantly, exposed the underlying structural and systemic cracks in Africa’s economy and its vulnerability to external shocks.
The workshop, Graham said is expected to yield common lines of understanding the trajectory and dynamics of contemporary crisis of the global financial system in the world and Africa, the character of Africa’s integration in the global economy, the resultant peculiarities of boom and bust in Africa and its vulnerabilities as well as strengthen engagement.
Tanoh said African governments’ analyses and responses to the ongoing global crises are both inadequate and ineffectual adding that apart from telecommunications and financial sectors, all other productive sectors of the African economy have sharply shrunk.
The African Union’s analysis for example merely rationalizes the global crisis as a temporary blip and not systemic. In effect, it assumes that Africa’s challenge in the midst of the worst economic depression since the Great Depression of the 1930s is a financing gap.
On Africa’s productive sector, Tanoh said, the amount of banking finance going to agriculture for example has dwindled across Africa by 45 per cent and 55 per cent for industry over the last two decades to make the continent even more vulnerable and susceptible to external shocks at the same time that African states’ ability to address these issues have been wrestled out of African hands by the combined force of neo-
A senior fellow at the Centre for Southern African Studies, Dot Keet, speaking on the “Impact of the Global Crisis on African Countries – Transmission Mechanisms, Evolution and Effects” said “what we face (in Africa) is a systemic crisis of the capitalist system”, adding that, the crisis has also exacerbated sectoral and class systems, relations and processes across the continent.
These crises will continue for some time, she said, adding that Africa faces a long period of hardship, instability and deepening levels of poverty.
University of Cambridge’s Gabriel Palma who spoke on the topic “New Trends in the World Economy: Finance and Financialisation of Commodities” said financialisation, loosely defined as an economic system or process which reduces all value that is exchanged – be it tangible, intangible, present or future promises – either into a financial instrument or a derivative of a financial instrument, happened much faster in developing countries and peripheral European Union states (such as Greece, Iceland, Ireland and Portugal) hence the severity of the crisis on these countries including African states.
He said recent dramatic price changes “did not and do not reflect real demand and supply imbalances”, adding that the major force pulling commodity prices up and down is speculation”.
Palma also pointed out there is a real threat of “stagflation” far worse than that of the 1970s which was associated with cost-
DAY 2, August 24, 2010
Day two zeroed in on Africa’s Political Economy and its Specific Vulnerabilities in the Global Crisis
Speaking on the Key Features of the Financial System and Financial Services in Africa”, Tanoh, noted that the corporate sector of Sub-
Tanoh, programme officer at TWN-
He said financialisation has restricted African states’ ability to direct credit and other forms of assistance to important sectors as such agriculture and manufacturing, leading to deindustrialization and the continent’s over reliance on imports of agricultural products.
Tanoh also dismissed IMF-
University of the Witwatersrand’s Nicolas Pons-
However in the case of Africa, aid has served as a very critical tool to de-
Speaking on the topic “The Washington Consensus, Market Liberalisation and Export-
Olukoshi observed that what these World Bank-
Prof. Olukoshi said all the promises of growth under the discredited Structural Adjust Programmes (SAPs) failed to materialize.
“African countries resumed growth (from 2001 to early 2008) only because of the new commodity boom. It had absolutely nothing to do with the implementation of the macro-
The social costs of the policies themselves have been so heavy, most gains made after independence were lost and Africa de-
The pretence that you can create an “agency of external restraint” as the American economist Paul Collier puts it, “that will hold down the hands of African governments and discipline the state through right-
He also cautioned participants against allowing the causes for which they fight for to be conflated with agendas “that sometimes we do not fully understand”, emphasizing the that “our struggles for change in our countries cannot be underwritten for us by anybody outside of our countries, no matter what their goodwill maybe”.
DAY 4, August 26, 2010
Day four focused on the Minerals Economy in Africa.
Abdulai Darimani, programme officer at TWN-
He said in response to the crises mineral-
Speaking on the “Issues and Trends in International Minerals Markets and Trade”, Dr. Yao Graham, Co-
He attributed this in part to the development curve of countries such as China and India in response to local demand as well as market speculation and dwindling global reserves of important minerals. In spite of the rise of China and India as major consumers of minerals, Europe, United States and Japan remain the key consumers of Africa’s mineral resources.
Graham said the mining corporate world is evolving quickly especially in Africa. Multinational mining corporations have a much higher presence in Africa than anywhere else in the world and this partly explains the weak regimes and the unduly extensive reach of US-
In Asia, he said, state-
Graham said Botswana which for many years was held up as an example of a successful mineral dependent country suffered perhaps the most from as commodity prices came crashing in the wake of the financial and economic depression.
Within weeks in 2008, Graham added, diamond prices fell by as much as 90 per cent leading to a 10 per cent slump in Botswana’s GDP to drive the Southern African country into the chilly arms of the IMF for over US$1.5 billion. This makes the pin-
Prof. Ray Bush of Leeds University on the topic “The New Scramble for Africa” observed that all of sub-
The relatively small size and precarious state of African economies opens them up to substantially high corporate bully as many of some of the largest mining and oil companies are several times worthier. ExxonMobil, the American oil giant’s net profit in 2008 for example was US$ 45 billion and US$ 2.3 billion for Anglo American mining company compared to an average of less than US$5 billion of GDP in SSA.
He said the new scramble for Africa is also reflected in the increasing interest in Africa’s oil reserves, both proven and potential by the developed countries and now China, India and other emerging economies. He cited the particular interest of the United States, EU and their transnational corporation’s keen interest in offshore. This is increasingly replicating offshore the enclave nature of the mineral mining sector onshore in Africa where the extraction of these non-
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