Helen Clark on the implications of the financial crisis for Africa

16 Jun 2009

Brief Remarks by Helen Clark, UNDP Administrator, High Level Panel Discussion on the Global Financial Crisis and the Implications for Africa

The global economic crisis has struck at the very time when economic growth has been getting real traction in much of Africa.

Between 2003 and 2008, gross domestic product in sub-Saharan Africa increased in real terms by more than five per cent annum, and at more than six per cent from 2004 to 2007.

Now, African economies face lower growth and contraction despite bearing no responsibility for the global crisis.

The recession adds to the stress which very high food and energy prices had already imposed on many countries.  Concurrently, we face the huge climate change challenge, related to the world’s present unsustainable use of natural resources.

Drops in export, volatility in commodity prices, reduced flows of remittances and of investment all exact a heavy toll.

It should be noted that remittances in many countries currently exceed export earnings.  While bilateral ODA to Africa was $26 billion in 2008, remittances from migrant workers to sub-Saharan Africa were about $20 billion.  They are projected to drop by between four and eight per cent in 2009.

So, without action now to combat the crisis, progress on the MDGs would stall – or even reverse.

There is also a higher probability of the outbreak or recurrence of conflict during severe economic shocks.

I urge all the Resident Coordinators and senior UNDP officials here to continue engaging with your respective host governments to identify the remedial actions we can take to reduce the impact of the crisis.

We can and must off co-ordinated and coherent policy and capacity development support to help countries navigate through the current recession, and to sustain development results over time.  It is critical now that we work particularly closely with the Bretton Woods Institutions and regional organizations.

UNDP has been responding to requests from programme countries for support in analyzing the human development impact of the crisis; designing policy responses - including on how to protect the most vulnerable; and facilitating resource mobilization.  UNDP can and does help determine what has worked in other countries to mitigate the impact of severe economic shocks and can advise other countries accordingly.  The economist placed in each UNDP country office in Africa becomes critically important in this regard.

I know many of you here are already engaging in such activities.  I also know that you are often stretched for capacity at the country level.  That is why we must leverage what resources we have to the greatest extent we can in responding to this crisis, and in all our activities in general.

Now to our panel.