Inter Press Service - September 8, 2004
Moyiga Nduru

"The advanced economies should provide more, and better coordinated development assistance - preferably in the form of grants - to support well-designed economic and social programmes," he added during a press conference in South Africa's economic hub, Johannesburg, this week.

However, Rato - who ended a two-day visit to the country Tuesday - did not provide exact figures on how much money wealthy countries should provide.

During the Group of Eight (G8) summit held in the Canadian town of Kananaskis in 2002, former Prime Minister Jean Chretien failed to persuade other leaders to commit half of their combined 12 billion dollars of annual aid to Africa.

Now Britain (a member of the G8, along with Japan, Germany, France, Italy, the United States, Canada and Russia) has pledged to ensure that Africa receives priority on the global aid agenda. Next year, Britain will head both the G8 and the European Union.

British Prime Minister Tony Blair's Commission for Africa, a think- tank launched in February this year, will advise him on how to reduce poverty and boost development on the continent. Inaugurating the commission, Blair lamented that "Africa risks being left ever further behind".

"Africa," he said, "is the only continent to have grown poorer in the past 25 years...(where) 44 million children do not go to school, millions die through famine, or disease, or conflict."

These concerns are echoed by aid agencies.

In a recent report, the British charity Oxfam said "More than half of sub-Saharan Africa's 600 million people still live on less than a dollar a day. More than 28 million Africans are living with HIV/AIDS. Forty percent of children never go to school in Africa - the only region in the world where the numbers of children out of school are rising."

But not everything is doom and gloom in Africa, Rato insists: "I sense a deeper commitment at the highest levels of government to the process of economic reform, good governance and closer integration into the world economy."

"Supported by the recovery in global economic activity, we expect economic growth in sub-Saharan Africa to rise to over 4.5 percent in 2004, and to in excess of five percent next year," he added.

This is Rato's second trip to Africa since he became head of the IMF in June 2004. During the first trip, undertaken in early August, Rato visited Nigeria, Gabon and Uganda.

"This is my second trip to Africa in a month. This travel has given me a deeper appreciation of the problems facing the continent, which will enable the IMF to provide a meaningful and durable contribution to its economic development," he noted.

In South Africa, Rato held talks with President Thabo Mbeki, Finance Minister Trevor Manuel and the Governor of the Reserve Bank of South Africa, Tito Mboweni.

He commended South Africa's economic performance, which has seen growth double to around three percent. Rato also praised the fact that officials had brought inflation under control while allocating more resources to the social sector.

"South Africa's economy is presently enjoying a recovery in activity that we expect to continue through at least 2005," he said.

Formidable challenges remain, however.

"Growth will need to be elevated to a higher plateau if there is to be a significant fall in unemployment (which is 40 percent now). This will involve strengthening South Africa's ability to attract investment by continuing efforts to improve productivity and competitiveness. It will also require pushing ahead with introducing labour market flexibility," Rato observed.

Efforts to pull Africa out of poverty are being undermined by ongoing conflict and political instability on a continent that has witnessed 186 coups d'etat and 26 major wars in the past half-a-century.

As was noted in Tuesday's press briefing, the troubled African states include Zimbabwe - which has been suspended from the IMF's borrowing facility. The country has experienced political violence and a controversial programme of farm occupations since 2000.

"Zimbabwe has high inflation - no growth, no reserve. These are all driven by the problems we all know. The solution will depend on the abilities of the leaders there to make changes," said Abdoulaye Bio- Tchane, IMF director for Africa.

After leaving Johannesburg, Rato travelled to Ouagadougou, capital of Burkina Faso, to attend the African Union's Extraordinary Summit on Employment and Poverty Reduction in Africa. This gathering ends Thursday.

At the summit, the IMF head will be bound to encounter criticism of his organisation's policies towards Africa, which many claim have worsened Africa's economic woes.

A Febrary 2004 report by the United Nations Conference on Trade and Development (UNCTAD) says Africa's share of world exports fell from about six percent in 1980 to two percent in 2002, and its share of world imports from about 4.6 percent 2.1 percent.

Africa's heavy dependence on primary commodities as a source of export earnings has meant that the continent remains vulnerable to market vagaries and weather conditions, notes UNCTAD.

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