Editorial Committee

Ndikumana, LéonceKamara, Abdul B.Chouchane, AudreyMafusire, Albert

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The Policy Briefs on the Financial Crisis(PBFC) are produced by the Complex of

the Chief Economist with contributionfrom other departments of the AfricanDevelopment Bank. The PBFC are inten-ded to present analyses of experiencesand lessons emerging from the FinancialCrisis, so as to encourage policy debatethat guides the search for sustainablesolutions to the crisis.

The findings, interpretations, and conclu-sions expressed in this paper are entirelythose of the author(s) and do not neces-sarily represent the view of the AfricanDevelopment Bank, its Board of Directors,or the countries they represent.

The Policy Briefs on the Financial Crisisare available online at http://www.afdb.org/

Copyright © African Development Bank 2009

Impact of the Crisis on African Economies -Sustaining Growth and Poverty Reduction

African Perspectives and Recommandationsto the G20

March 11 , 2009

AFRICAN DEVELOPMENT BANK GROUP

A report from the Committee of Finance Ministersand Central Bank Governors

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Executive Summary

Although most African countries are noton track to meet the MillenniumDevelopment Goals, Africa had madesteady progress over the last decade,building the foundations for higher growthand poverty reduction. This more optimis-tic picture is now being undermined byfactors outside its control. While the initialeffects of the financial crisis were slow tomaterialize in Africa, the impact is nowbecoming clear. It is sweeping awayfirms, mines, jobs, revenues, and liveli-hoods; it is in short a full blown develop-ment crisis. For the first time in a decadethere will be zero growth per capita. Thisnote provides evidence of the effects, andsuggests action needed. For Africa noless than elsewhere time is of essence;decisive remedial action is needed now.

The growth outlook has deterioratedseverely. Macroeconomic balances haveworsened, with many countries facingwidening current account and budget defi-cits. The crisis is reducing trade, themainstay of recent strong growth in Africa.The expected shortfall in export revenuesamounts to USD251 billion in 2009 andUSD277 billion in 2010 for the continentas whole, with oil exporters suffering thelargest losses.

In addition to exports, capital inflows arealso declining, including worker remit-

tances and tourism receipts. The stocksof foreign reserves are running dange-rously low, with some countries down toonly a few weeks of import cover (forexample, the DRC). This severely jeopar-dizes the capacity to import even basiccommodities such as food, medical sup-plies, and agricultural inputs. The poor arethe most affected. The private sector hasbeen affected by a shortage of liquidity ininternational markets, with adverse impacton trade and investment. Internationalbanks have failed to issue lines of creditor even confirm pre-committed ones.Projects have been delayed, and somehave already been cancelled.

African governments have undertakenmeasures to minimize the impacts of thecrisis. These include: setting up specialmonitoring units, providing fiscal stimuluspackages, revising budget expenditures,targeting assistance to key sectors,strengthening the regulation of the ban-king sector and financial markets, expan-sionary monetary policy, and foreignexchange controls to protect the exchan-ge rate. The key concern is the decelera-tion of growth, which will disproportionate-ly affect the poor. It is critically importantto preserve the foundations of growth,erected through steady policy reforms andimprovements in the investment climate;this will allow the continent to resumegrowth after the crisis.

To achieve this goal, it is critical to sustainadequate levels of investment, especiallyin infrastructure. However, Africa’s abilityto do so is severely limited. Pre-existingresource constraints are being exacerba-ted by a widening saving-investment gap.We estimate that just sustaining pre-cri-sis growth levels in Africa would requirean additional USD50 billion in 2009 andUSD56 billion in 2010. Increasing invest-ment to the level needed to achievehigher MDGs-consistent growth rates,would require an additional USD117 bil-lion in 2009 and USD 130 billion in 2010.

Previous, repeated, commitments toincrease aid to Africa must be deliveredquickly: speed of access is vital. But thatalone will not be enough if Africa has tobe able to restore a level of growth, suffi-cient to reduce the levels of poverty. Newand additional resources must be unloc-ked. Africa must be part of the global res-ponse to the crisis. Our key recommenda-tions to the G20 are:

Demonstrate political will and takeaction now

• The severity of the crisis calls for thesame sense of urgency as shown inrescue plans for banks and corporationsin advanced economies.

• Delivering promptly on existing commit-ments is key to donor credibility as the

continent’s committed developmentpartners.

• Protect the poor and the vulnerable byensuring essential public investmentprogrammes in health, education, nutri-tion, and sanitation can be maintained.

• Support social safety nets to protect thepoor, the unemployed and the sociallymarginalized.

Provide additional resources

• Commit 0.7 percent of developedeconomies own stimulus packages toassist poorer countries, ensuring newinitiatives are truly additional to existingaid plans.

• Augmenting the concessional resourcesavailable to the IMF and ease access.

• Increase and sustain investment ininfrastructure at national and regionallevel: stimulus packages must primarilytarget infrastructure projects.

• Increase the resource envelope forregional development banks; inparticular agree on an early review ofcapital adequacy of the AfricanDevelopment Bank.

• Increase trade financing by injectingnew resources for specialized facilities,

including through regional developmentbanks.

Increase policy space and flexibility,and reduce conditionality

• Focusing on results, rather thanprescribing rigid policies and actions,allowing countries space to respondaccording to their particular needs andcircumstances.

• Provide more predictable flows of aid,with more fast disbursing and frontloaded assistance, consistent withAfrican priorities.

• Increase flexibility in macroeconomicframeworks to allow more scope tobalance macroeconomic stability andthe need to stimulate domestic demand.

• Review debt sustainability criteria toallow access to credit for countries withadequate potential to borrow.

• Reform procedures in order to promotemore rapid and less conditional aiddelivery.

Promote trade

• Conclude an ambitious and develop-ment-focused Doha Round, provide Aidfor Trade, and technical assistance.

Increase transparency, accountability,and equitable representation

• Provide an adequate voice and votingrights to African countries in IFIs andmajor global governing bodies.

• Tackle tax havens and assist in therecovery of Africa’s stolen wealth;enforce transparency in financialtransactions in banking systems inadvanced economies to deter illegaltransfers of funds from Africancountries.

1. Introduction

1.1 The crisis has come at a time whenAfrica is turning the corner, steadily buil-ding the foundations for higher growthand poverty reduction. But still, mostAfrican countries are lagging behind interms of meeting their MDGs targets. Theoptimistic growth outlook is now undermi-ned by factors outside Africa’s control.While the initial effects of the crisis wereslow to materialize, the tide of the“Tsunami” is moving fast, sweeping awayfirms, mines, jobs, revenues, and liveli-hoods. Time is of the essence and decisi-ve action can wait no longer.

1.2 This note documents the severity ofthe impact of the crisis on African econo-mies. It attempts to portray the magnitudeof financing gaps that must be bridgedwith a view to checking not only the crisis,but most importantly preserving the basisfor high growth and poverty reduction.The note demonstrates that while it isimportant for donors to deliver on pre-committed pledges, those alone will notbe sufficient to bridge the widening finan-cing gaps and maintaining the growthmomentum on the continent. It especiallyargues for additionality of aid, flexibility inaid allocations and faster delivery mecha-nisms to improve responsiveness and ali-gnment with country-specific needs andcircumstances. It concludes with a set ofconcrete recommendations for the G20,

the donor community, and African govern-ments.

2. Impact

Overall assessment

2.1 Africa has been severely hit by the cri-sis, with its growth rate forecasted to dipbelow 3 percent in 2009 (2.8 percent) forthe first time since 2002 (Table 1). Sub-Saharan Africa is expected to grow at ameager 2.5 percent. Middle income coun-tries have been hit severely due to theirrelatively higher integration into the globaleconomy.

2.2 The slowdown in growth is primarilydue to declining trade flows. The expec-ted short-fall in export revenues is immen-se: USD 251 billion in 2009 and USD277billion in 2010. Oil exporters will take thebiggest hit, with a shortfall of USD 200 bil-lion in 2009 and USD220 in 2010 (Table2). With exports declining faster thanimports, the trade balance will deterioratein most countries. 2009 and 2010 exportshave been revised downwards by 40 per-cent. As a result, from a comfortable ove-rall current account surplus of 2.7 percentof GDP for both 2008 and 2007, the conti-nent will record an overall deficit of 4.3percent of GDP in 2009.

2.3 Capital inflows, which have been ano-ther important driver of recent growth, are

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also declining. Similarly, most countriesare experiencing a slowdown in migrantremittances as a result of the weakeningeconomies in the West and Africa’s lar-gest economies. For example, in Kenya,remittances have been steadily fallingsince October 2008 from USD 61 millionto USD 39 million in January 2009.Tourism receipts were down 13 percent inthe 4th quarter of 2008, compared to2007, further undermining the country’sefforts to build up its foreign exchangereserve base.

2.4 The stocks of foreign exchangereserves are deteriorating. In the DRC,reserves are down to only a few weeks ofimport cover. At this pace, many countrieswill not be able to afford even basic com-modity imports such as food, medical sup-plies, and agricultural inputs.

2.5 Government revenues are alsoexpected to decline. Diversified econo-mies will be less impacted than others.For example, the 2009 forecastedgovernment revenues for Tunisia andSouth Africa have been revised down-wards by 1.2 and 0.4 percentage points,respectively. On the other hand, highlyspecialized economies such as Libyaand Algeria (oil-dependant countries) willsee government revenues decline shar-ply by 17 and 16 percentage points, res-pectively, in 2009.

2.6 Overall budget balances will worsenfor the continent as a whole, going from aglobal budgetary surplus of 2.8 percent ofGDP in 2008 to a deficit of 5.4 percent ofGDP in 2009. The impact on the budget iseven worse for net oil-importing countriesand those with substantial food importsbecause of the carry-over effects of thehigh oil and food prices of the past year.Oil exporters, for their part, are experien-cing major declines in revenues, and thisis expected to persist through 2010. Thecrisis has underscored the perils of theexcessive dependency of African econo-mies on production and exports.

2.7 Although low-income countries (LICs)are benefiting from the decline in oilprices, they are experiencing difficultiesdue to falling prices and demand for theircommodity exports. Current account defi-cits are worsening. In addition, FDI andremittances are declining. While LICs, asa group, are forecast to grow faster thanmiddle income and oil-exporting countriesin 2009, their populations will be severelyaffected by the crisis due to their alreadyrelatively lower pre-crisis living standards.

2.8 The drying up of liquidity in internatio-nal financial markets has hit the privatesector as well as governments. Forgovernments, attempts to raise long-termfinance through sovereign bond issuehave failed, especially in South Africa,

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while a Ghana Telecom bond issue forUSD300 million has been cancelled . TheEurobond issues for Kenya, Nigeria,Tanzania and Uganda have beendelayed. This has caused costly delays inthe implementation of planned publicinfrastructure programs.

2.9 A number of private sector projectsacross Africa have been suspended ordelayed because some investors with-drew and the funding conditions becamemore constraining due to higher spreadand lower debt-to-equity exposure (Table3). A gas project in North Africa was sus-pended after its approval by the Bank inOctober 2008 because the financingcould not be closed. Moreover, seveninfrastructure projects, where the AfDBhas been approached to provide funding,are currently delayed because of the cri-sis. The financial crisis has led to anincrease in demand for AfDB funding forprivate sector operations. The AfDB hasbeen asked to step into several projects toprovide additional funding, even in someof which it had already gotten involved.The Bank has recently granted two loanextensions of EUR 70 million and USD48.75 million, and a proposal for anotherUA 229 million loan extension will beconsidered soon.

Specificity of the severity of the crisisat the country level(1)

Regional engines of growth were the firstaffected

2.10 Expectedly, the large, financiallydeveloped and open economies were thefirst to be hit by the crisis through financialmarkets (South Africa, Egypt) and exports(oil for Algeria and Nigeria, and mining forSouth Africa).

2.11 In South Africa, the financial sectorexperienced a collapse of asset prices,dramatic increases in the cost of capital,and a severe contraction in lending. Thishas led to sharp downturns in the retailand manufacturing sectors. Between May2008 and March 2009, South Africa’sJALSH index has fallen by about 46 per-cent and the Rand depreciated by 23 per-cent against the US dollar. Furthermore,the mining sector is experiencing a largefall in output and employment, driven bylower global demand for commodities.

2.12 Nigeria’s investment, output andgovernment revenues have fallen signifi-cantly due to declining prices for hydro-carbons (oil and gas). Oil and gas extrac-tion account for 30 percent of the econo-my’s GDP, over 90 percent of its exports

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1The African Development Bank greatly appreciates the support from African Central Banks and Ministries ofFinance, and regional Banks (BCEAO and BEAC) in providing country-level information on the impact of thecrisis and policy responses.

and a large share of government reve-nues. While no major bank is underimmediate threat in Nigeria, the bankingsector may be exposed to rising defaultrisk of its clients operating in the export¬-oriented sectors, including oil. A resultingslowdown in bank lending will amplify theeffects of weak performance of the oil andgas sector on growth. While food priceinflation is declining, this could be rever-sed by the significant depreciation of itscurrency. The decline in foreign exchangereserves due to lower exports is exacer-bated by falling remittance inflows sincethe beginning of the crisis.

2.13 As the regional engines of growthweaken, this is expected to have signifi-cant knock-on effects on smaller neighbo-ring economies through trade linkagesand worker remittances. For example,remittance flows to the DemocraticRepublic of Congo (DRC) are falling dueto the slowdown in South Africa, furtherexacerbating the impact of the decline inmineral exports.

Pre-crisis success stories are not spared.

2.14 The crisis is also affecting the coun-tries that had been experiencing severalyears of sustained growth built uponimproved economic fundamentals andprudent fiscal policies. Botswana andTunisia provide two instructive examples.

2.15 Botswana has experienced a sharpdecline in industrial production, exportand government revenues. It has provento be highly vulnerable to shocks due toits high dependence on diamond exports(representing 35 to 50 percent of govern-ment revenues).

Its foreign reserves are falling rapidly, andthe fall in mineral revenues is expected tobe prolonged, limiting the government’sability to finance economic recoveryplans. Its growth rate is expected toremain below 3 percent in 2009 and2010. The crisis has underscored the criti-cal role of export diversification in reinfor-cing the resilience of economies to exter-nal shocks.

2.16 Tunisia has one of the most diversi-fied economies in Africa. Nevertheless, ithas experienced the full spectrum of theeconomic downturn from contraction inindustrial production and exports to sharpdeclines in government revenues andforeign reserves. Key sectors of the eco-nomy have been affected, from manufac-turing to tourism. As a result, its growthprojections for 2009 have been reviseddownwards by 1.5 percentage points bet-ween November 2008 and February 2009.

Mineral resource dependent and fragilestates

2.17 Excessive specialization in mineralshas proven to be even more disastrous

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for countries with poor governance andweak state institutions. This is the casefor the DRC and the Central AfricanRepublic. Lower demand and prices forcommodities are compounded by higheconomic and political uncertainty. Riskaversion has induced investors to relocateto lower risk countries, resulting in sharpdecline in foreign direct investment (FDI).The combination of falling export reve-nues, weak governance capacity, and aprolonged retrenchment in investmentaggravates already widespread povertyand threatens the stability of these fragilestates.

2.18 In the Democratic Republic ofCongo, 100,000 jobs have been lost dueto smelter closures. Foreign reserves aredown to about one week of imports; thecountry will soon be unable to purchaseimported essentials such as food, fuel,and medication.

2.19 In the Central African Republicexports of wood and diamonds have col-lapsed, causing large losses of employ-ment. The Société d’ExploitationFforestière en Centrafrique (SEFCA) haslaid off half of its employees as its orderswere cut by half. The economy is basical-ly on life support. Regional neighborshave contributed CFAF 8 billion (morethan USD15m) as the government wasunable to pay the salaries of civil ser-vants. Debt arrears are accumulating, fur-

ther undermining the country’s capacity tomobilize external resources. This situationis clearly threatening the stability of acountry that is just coming out of conflict.

Oil-producing countries face declining fis-cal revenues

2.20 Several oil-producing countries havebeen forced to severely curtail their publicexpenditure plans, including public infra-structure investment, due to lower fiscalrevenues. In Angola, government revenuefor 2009 is expected to be 24 percentlower compared to 2008. The non-oil sec-tors, such as construction, manufacturingand services, are heavily dependent onpublic sector demand and are also expec-ted to slow down considerably. TheAngolan economy is expected to contractby 7 percent in 2009, following a double-digit growth rate in 2008 (15.8 percent), areversal of almost -23 percent.

Agriculture dependent economies

2.21 The financial crisis has amplified theimpacts of the food crisis. The deprecia-tion of national currencies against majorreserve currencies has raised the cost offood imports. This impact will be particu-larly harder on economies with large food-trade deficits. Urban populations havebeen particularly affected as job opportu-nities shrink. Attempts to subsidize foodand oil prices are unsustainable due to

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low government revenues and fallingforeign exchange reserves. Ethiopia, forexample, has been steadily losing itsreserves over the last few months. In turn,credit to the private sector has declinedconsiderably since the third quarter of2008 as the government increased itsdomestic borrowing to finance the oil sub-sidy bill. In just six months (August 2008to February 2009) Kenya’s total usablereserves (official plus commercial banksholding) fell from USD 5,287 million in toUSD 4,726 million. Over the same per-iod, Kenyan Central Bank’s reserves hol-ding declined from 4.1 months of importsto 3.1 months (below the statutory requi-rement of 4 months). By end February2009, the Kenyan shilling had depreciatedby 15.7 percent against the US dollarrelative to September 1, 2008.

3. Africa is trying, but thescope to do more is verylimited

3.1 African governments have taken anumber of initiatives to mitigate the impactof financial and trade shocks. However, itslimited resources are inadequate in rela-tion to the scale of the impact. Manygovernments have set up special monito-ring units to identify the crisis’ advanceand to formulate targeted responses. Inaddition, governments have introduced arange of policy measures, including fiscal

stimulus packages, targeted assistance tosectors, capital and exchange controls;new regulations in the banking sectors,and expansionary monetary policies (seeTable 4).

Fiscal stimulus packages

3.2 Emulating the example of developedand emerging economies, some Africangovernments have implemented fiscal sti-mulus plans. This includes increases inpublic investment expenditures as well astax reductions. However, in some coun-tries, the severity of the crisis has forcedthe governments to retrench and underta-ke a contractionary fiscal policy.

3.3 In Mauritius, the government announ-ced a stimulus package to boost domesticdemand and increase job creation inJanuary 2009. This package is worth 10.4billion of Mauritian Rupees (USD 0.3 bil-lion), or approximately 3 percent ofMauritius GDP. In Nigeria, the govern-ment is contemplating using its USD 52billion external reserves to shore up theeconomy through a stimulus package.

3.4 The Liberian government undertook acomprehensive revision of its revenuecode, proposing a 10-percent reduction incorporate and income tax rates in a bid tostimulate private sector activity. In addi-tion, the government is planning to cutregional trade tariffs by a quarter of a per-

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centage point with a view to fosteringtrade within ECOWAS. The South Africangovernment has proposed an adjustmentto personal income tax that should provi-de middle and lower income earners withR13.6 billion (USD 1.35 billion) in taxrelief.

3.5 In Senegal, the government loweredbudgetary expenditure by 4 percent ofGDP and priority expenditure by 0.6 per-cent of the GDP. Similar actions weretaken in Cape Verde, Sudan and Uganda.In Tunisia, the 2009 budget includes asignificant increase in public investmentsin line with its plan to increase externalcompetitiveness and employment andstrengthen social protection. Similarly, inSouth Africa, the government increasedfunding for public investment projects withallocation of R 690 billion (about USD 80billion) over the next three years.

Targeted assistance to sectors

3.6 Many countries have implemented tar-geted sectoral assistance plans to supportsectors that are considered as key growthdrivers. These measures are intended toreduce job destruction and the loss ofsector specific capital and know-how. InNigeria, the government injected N70 bil-lion into the severely weakened textileindustry. The Rwandan governmentannounced plans to reduce the quantity ofits tea sold through auctioning at

Mombasa and improve direct sales toreach a target of USD 54 million tea salesin 2009. In Uganda, the government pro-vided assistance to the transportation sec-tor by writing off public loans to compa-nies.

Banking regulation and capital accountcontrols

3.7 Prudential capital controls in mostAfrican banking systems have helped tominimize contagion effects on Africanbanks. These controls also reduced capi-tal outflows during the crisis. In addition,some governments have introduced depo-sit insurance schemes.

3.8 In Tanzania, profit repatriation hasbeen regulated to minimize the contagion,as bank subsidiaries cannot automaticallytransfer funds to compensate for losses inparent banks. The Egyptian governmenthas established a deposit insurance fundto boost public confidence in banking sec-tor.

3.9 As a response to the large deprecia-tion of their national currencies, govern-ments have undertaken a variety of mea-sures to defend their currency or to boostcompetition. Some have attempted todefend a managed exchange rate. Insome countries with fixed exchange rateregimes, governments have devaluatedtheir currencies to boost competitiveness.

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3.10 The Nigerian Central Bank hadaggressively intervened in the foreignexchange markets to stem the slide of theNaira. However, defending the Naira hasproven unsustainable due to decliningexport revenues. Other central bankshave also attempted to defend the natio-nal currency, but have run out ofreserves.

Expansionary monetary policy

3.11 Several countries have eased theirmonetary policy by cutting interest ratesto stimulate consumption and encourageborrowing. Examples include Botswanawhere the Central Bank has cut its bankrate by 50 basis points to 15 percent inDecember 2008. Similarly the EgyptianCentral Bank has cut its benchmark inter-est rate for the first period since April2006. The Namibian Central Bank and theSouth African Reserve Bank also reducedtheir repurchase rate to stimulate borro-wing and boost private investment andconsumption.

Bond financing of public expenditure

3.12 Some countries have financed coun-ter-cycle expenditures via the emission oftreasury bills and bonds. In Cape Verde,the Central Bank introduced Treasury billsto encourage private saving to remain inthe national financial system. The Kenyangovernment issued an infrastructure bond

that amounted to 18.5 billion shilling (USD232.6 million) with 12-year maturity inFebruary 2009. The bond was over-sub-scribed, a testimony to the existence of asubstantial untapped domestic savingcapacity.

4. Africa is facing a largeand growing financing gap

4.1 Notwithstanding all these laudable ini-tiatives, it is clear that African govern-ments do not have adequate financingcapacity to cushion populations againstthe impact of the crisis and protect thegains recorded in the past years in termsof growth and poverty reduction. Theresources needed are immense and thesavings are limited. Conservative esti-mates demonstrate that even full deliveryof pledged external assistance will not besufficient to bridge Africa’s growing finan-cing gap.

4.2 The most important risk is that theshortage of financing will depress invest-ment, with damaging effects on growth,severely undermining the continent’s abili-ty to achieve the MDGs. Although Africancountries were growing faster before thecrisis, the growth rates were still not suffi-cient to achieve the MDGs. However, atthe moment, even preserving the pre-cri-sis growth rates seems untenable formany countries due to a shortage offinancing.

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4.3 We have estimated that for the conti-nent to maintain its growth momentum of2007, an infusion of large amounts ofexternal financing will be needed to bridgethe investment-saving gap. Under theconservative scenario of maintaininggrowth at the pre-crisis level, the resour-ce gap amounts to USD 50 billion for2009 and USD 56 billion for 2010. But ofcourse, maintaining the growth rates atthe pre-crisis levels will not allow Africancountries to make substantial progress inreducing poverty. To raise growth rates tothe 7 percent minimum deemed necessa-ry to achieve the MDGs, the continentwould need an infusion of about USD117billion in 2009 and USD 130 billion in2010 to bridge the investment-savingsgap. The bulk of the investment wouldnaturally go into infrastructure. The AfricaInfrastructure Country Diagnostic study(2)estimated Africa’s infrastructure needs atUSD 75.5 billion per year for the next 10years, including capital expenditure(USD38.1 billion) and operations andmaintenance (USD37.4 billion) (see alsoFigure A1 and Table A1).

4.4 Our estimates of the financing gap arein the same range as the ones generatedby sister institutions, but much higher thanthe sums pledged by the developmentassistance community before the crisis

(Figure 1). The 2005 Gleneagles Summitcommitted to raising aid to Africa by USD25 billion per year until 2010. This is vir-tually half the amounts needed to onlyallow African countries to maintain theirpre-crisis growth rates, which are defini-tely not sufficient to bring the continentanywhere closer to meeting the MDGs.

4.5 Therefore, new assistance initiativesmust bring additional resources. Deliveryof pre-committed aid will not make a dentinto the hardships experienced by thecontinent as a result of the crisis. At leastUSD 117 billion are needed to propel thecontinent into a higher growth path to giveit a chance to reach the MDGs.

5. Recommendations

5.1 Urgency of action: The severity of thecrisis calls for swift action, with the senseof urgency as demonstrated in the rapidsetup and delivery of bailout plans forbanks and corporations in advanced eco-nomies.

5.2 Scaling up resources: Early initiativesto stem off the impact of the crisis havetypically involved a reallocation of existingresources. This is vastly inadequate toaddress the impact of the crisis. Therefo-re, the following is recommended:

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2The study covered Benin, Burkina Faso, Cape Verde, Cameroon, Chad, Congo (RDC), Cote d'Ivoire,Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Rwanda,Senegal, South Africa, Sudan, Tanzania, Uganda and Zambia.

• New initiatives must involve “additionali-ty” of aid over and above pre-committedpledges. Donors should pledge to provi-de 0.7 percent of their domestic stimu-lus packages to assist poorer countries,using existing multilateral channels.

• Donors must agree to increase theresource envelopes of the BrettonWoods Institutions and major regionaldevelopment banks to scale up supportfor countries. Resources available tothe IMF, particularly through the ESFand PRGF, should be increased.

• IFIs have accepted that they must playa counter-cyclical role. But they willneed the resources to do so.Shareholders must move quickly toincrease the capital of major regionalbanks to allow them to help fill thegrowing financing gaps faced bymember states. In particular we want tosee an early review of capital adequacyof the African Development Bank.

• Shareholders and donors must quicklyagree to streamline aid deliveryprocesses in BWIs and major regionalbanks to increase the speed andeffectiveness of crisis responseinitiatives.

• The Debt Sustainability Frameworkshould be reviewed within the context ofthe crisis, and the closure of access to

credit. Those countries that are able toservice the payments should bepermitted to access less or non-concessional resources.

5.3 Increase and sustain investment ininfrastructure at national and regionallevels. Africa already faces a fundamentalinfrastructure gap at both national andregional level. Without filling that gap andpromoting economic integration, Africa willnot be able to benefit from the eventualglobal recovery. To achieve this goal:

• Donors must commit to increasingfunding for public infrastructure inAfrica.

• Fiscal/macroeconomic policy frame-works need to be more flexible toprovide African governments withadequate policy space to increase bud-getary allocations to public infrastructu-re.

• The private sector must take a leadingrole in infrastructure investment and themanagement of infrastructure services,including through public-private partner-ships.

• Governments must explore andencourage management arrangementsthat accelerate cost recovery, includingfee-for-service schemes in publicgoods.

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5.4 Trade financing and trade facilitationmust be at the center of the short-termand long-term action plan. In particular,the following is needed:

• The G20 should resist taking protectio-nist measures in response to the crisis,and any that are put in place must bestrictly time limited.

• They should commit to an early conclu-sion of an ambitious and developmentoriented Doha Round.

• Shareholders need to agree to increasefinancing capacity of the BWIs andregional development banks to providetrade finance facilities.

• The G20 must provide technical,financial and political support to the Aidfor Trade Initiative.

• The donor community should establisha special Trade Facilitation TrainingFund (TFTF) for technical assistance toAfrican countries to improve theirpreparedness for trade negotiations.

5.5 Protecting the poor and the vulne-rable: It is critical to preserve the modestgains in poverty reduction and access tobasic social services achieved before thecrisis. In this respect, donors and govern-ments are called to:

• Maintain adequate levels of publicspending on health, education(including special programs such asschool feeding programs), nutrition, andsanitation.

• Ensure adequate and stable funding forglobal initiatives such as the GlobalFund for the fight against HIV/AIDS,malaria, and tuberculosis, therebyavoiding large numbers of preventabledeaths.

• Provide financial support for socialsafety nets to protect the poor, theunemployed and the socially marginali-zed. Such safety nets should be desi-gned to allow easy countercyclicaladjustment to cushion the poor againstthe impact of shocks.

5.6 Increasing policy space and flexibility,speeding up aid delivery. In addition toscaling up aid, donors need to supportreforms in the aid delivery processes soas to:

• Increase flexibility and tailor aid alloca-tions and delivery processes to recipientcountry’s circumstances, includingfragility, narrow fiscal space, and limitedtechnical and institutional capacity.

• Review the current performance basedaid allocation models used to betterreflect the diversity of needs and

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circumstances, in particular the positionof fragile states, and the fundamentalneed to promote economic integrationin Africa.

• Increase predictability of aid to facilitateplanning and implementation ofdevelopment programs. Deliveryshould be frontloaded and more provi-ded in fast disbursing program ratherthan project support.

• Increase policy space by greater focuson results and less on prior conditionali-ty, and promoting country ownership ofprograms through greater participationof recipients in dialogue and consulta-tion.

5.7 The crisis provides an opportunity toimprove global governance for moretransparency, accountability, and equitablerepresentation. In particular:

• Africa and other developing regionsmust be given adequate voice andrepresentation in order to advance theirdevelopment interests;

• Voting weights at the IFIs, which arecurrently based on shareholdings, mustbe revisited to remove the bias in favorof rich countries and to recognize theimportance of the IFIs to achievementof the development plans of its mem-bers.

• Due attention should be given to therole of the regional institutions asrepresentative of their regional membercountries.

5.8 The role of the state

• Advanced and emerging countries, aswell as African countries are urged tostrengthen the regulation of financialsystems to increase efficiency whileminimizing risk;

• Any efficiency gains from liberalizationof financial systems and other marketsmust be balanced against the socialbenefits of regulation in terms of finan-cial stability and equitable participationin the market economy;

• Donors and multilateral institutions mustincrease assistance for capacity buil-ding in African countries, notablythrough targeted technical assistanceprograms.

5.9 Recovery of Africa’s stolen wealth:Billions of dollars of stolen wealth fromthe continent, including funds smuggledthrough embezzlement of borrowedmoney, are banked in Western financialinstitutions and tax havens. The ability ofpoorer countries to develop a sound reve-nue base and provide basic services isthereby compromised. In addition toenhanced action in Africa to counter cor-ruption we recommend:

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• Governments in advanced economiesto enforce transparency in financialtransactions in their banking systems tostem off illegal transfers of funds fromthe continent.

• The international community investscoordinated financial intelligence andresolute political will, as it has in thewar against terrorism, in efforts at pre-venting the smuggling of African assets,to track down and recover stolenwealth.

* In this respect, the G20 is urged tosupport the UN Stolen AssetsRecovery initiative and other similarinitiatives aimed at preventing moneylaundering, tax evasion, and capitalflight.

5.10 Climate Change: The present finan-cial crisis adds to Africa’s increasing bur-

den of coping with changes brought aboutby global warming which is an externalshock. It reduces resources for adapta-tion and mitigation programs in Africancountries. It is critical that adequate newresources be made available to supportadaptation and that these be additional toexisting development programs.

5.11 The political will of Africa’s develop-ment partners will be severely tested inthese moments of economic crisis.Advanced economies were able to mobi-lize massive amounts of funds for fiscalstimulus and bailout packages to rescuebanks and corporations in the wake ofthe crisis. With much less resources thanthese rescue packages, the donor com-munity can preserve its credibility as acommitted development partner forAfrica.

13

14

USDbillion

Maintainpre-

crisisgrowth

ReachMDG

growth

Infrastructure

gap

WorldBank

gaplow

WorldBank

gaphigh

Gleneagles

pledges

15

Table 1: Real GDP Growth (%): Data before and after CrisisReal GDP growth GDP change

Before crisis After crisis After crisis

2008(e) 2009(p) 2008(e) 2009(p) 2008-2009

Algeria

Angola

Benin

Botswana

Burkina Faso

Burundi

Cameroon

Cape Verde

Central African Rep.

Chad

Comoros

Congo, Republic of

Congo, Dem. Rep. of

Côte d'Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia, The

Ghana

Guinea

Guinea-Bissau

Kenya

Lesotho

Liberia

Libya

4.8

11.5

4.9

5.3

4.7

5.8

4.8

7.6

4.0

3.2

4.5

6.4

6.6

2.8

5.6

6.8

5.8

1.3

7.5

4.2

6.0

6.0

5.0

2.1

4.0

5.2

9.2

8.0

4.8

5.1

5.3

5.2

5.8

5.6

4.6

7.0

4.5

-0.7

4.5

6.4

7.1

3.8

5.6

6.7

4.1

1.1

7.4

4.1

6.0

6.3

5.0

2.2

6.5

5.4

11.0

7.8

3.3

15.8

5.0

3.9

4.2

3.2

4.1

6.1

2.6

0.2

0.5

7.0

5.7

2.3

5.9

7.2

9.9

1.2

11.6

5.5

5.7

6.4

4.7

3.2

2.6

4.2

7.3

6.5

0.2

-7.2

5.3

2.6

6.0

2.9

3.1

3.6

3.2

-0.7

0.8

7.7

-0.6

3.8

6.5

4.3

3.7

1.6

6.5

4.0

5.0

5.8

3.8

3.1

5.0

3.8

10.8

3.4

-3.1

-23.0

0.3

-1.3

1.8

-0.3

-1.0

-2.5

0.7

-0.9

0.3

0.8

-6.3

1.5

0.6

-2.9

-6.2

0.4

-5.1

-1.5

-0.7

-0.6

-1.0

-0.1

2.4

-0.3

3.5

-3.1

16

Source: AEO 2009 Projections. World economic outlook Database, October 2008 and FAONote: (p) Projections; (e) Estimation

Real GDP growth GDP change

Before crisis After crisis After crisis

2008(e) 2009(p) 2008(e) 2009(p) 2008-2009

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Rwanda

São Tomé & Príncipe

Senegal

Seychelles

Sierra Leone

Somalia

South Africa

Sudan

Swaziland

Tanzania

Togo

Tunisia

Uganda

Zambia

Zimbabwe

AFRICA

6.5

5.1

4.7

5.0

5.0

6.0

7.0

4.4

4.7

6.2

4.0

6.0

4.9

5.9

6.5

.....

4.0

10.7

1.0

6.5

3.5

5.5

6.2

6.3

-4.5

5.9

6.7

5.5

4.8

5.0

4.9

6.1

6.8

3.3

4.5

6.1

5.6

6.0

4.6

4.2

6.5

.....

4.9

11.0

1.0

6.7

3.9

5.6

6.3

6.4

-4.0

5.9

7.0

8.4

3.6

5.2

4.8

5.7

6.2

3.4

4.8

6.1

8.5

5.8

3.7

1.5

5.4

.....

3.1

8.4

2.6

6.8

0.8

5.1

7.0

5.5

-5.2

5.7

4.8

6.5

4.2

3.4

3.0

5.4

4.0

2.7

1.8

4.0

6.6

6

3.5

-0.4

6.3

.....

1.1

5.0

2.5

6.1

3.9

4.1

5.6

2.8

-5.6

2.8

-2.2

-1.9

0.6

-1.8

-1.8

-0.2

-2.2

-0.7

-3.0

-2.2

-1.9

0.2

-0.2

-1.9

0.9

.....

-2.0

-3.4

-0.2

-0.7

3.1

-1.0

-1.3

-2.7

-0.4

-2.9

17

Table 2: Export revenues and Current Account Balance: Data before and after Crisis

Algeria

Angola

Benin

Botswana

Burkina Faso

Burundi

Cameroon

Cape Verde

Central African Rep.

Chad

Comoros

Congo, Republic of

Congo, Dem. Rep. of

Côte d'Ivoire

Djibouti

Egypt

Equatorial Guinea

Eritrea

Ethiopia

Gabon

Gambia, The

Ghana

Guinea

Guinea-Bissau

Kenya

Lesotho

Liberia

Libya

84.42

78.63

0.45

5.31

0.90

0.06

4.75

0.12

0.24

4.53

....

7.23

14.57

11.45

0.11

35.03

15.22

0.03

1.68

11.19

0.11

5.66

1.63

0.12

5.64

0.91

0.73

67.90

86.35

90.52

0.51

5.45

1.03

0.07

4.60

0.12

0.26

4.38

.....

9.26

16.69

12.16

0.13

37.90

14.77

0.12

1.78

11.14

0.11

5.92

1.78

0.13

6.32

1.04

1.18

78.13

43.62

40.43

0.33

4.77

0.74

0.06

4.09

0.08

0.15

2.00

.....

4.33

7.28

7.85

0.09

24.36

7.71

.....

1.22

6.49

0.07

4.72

1.18

.....

5.03

0.69

0.37

30.80

46.87

45.91

0.34

4.77

0.78

0.06

4.35

0.08

0.15

2.24

.....

4.76

8.10

8.38

0.09

25.21

8.57

.....

1.37

7.11

0.08

4.84

1.27

.....

5.08

0.75

0.41

34.30

40.79

38.19

0.12

0.54

0.17

0.01

0.66

0.04

0.10

2.54

.....

2.91

7.30

3.60

0.02

10.68

7.51

.....

0.46

4.71

0.03

0.94

0.45

.....

0.61

0.22

0.36

37.10

39.48

44.61

0.17

0.68

0.25

0.01

0.25

0.04

0.11

2.13

.....

4.51

8.59

3.78

0.04

12.69

6.21

.....

0.41

4.02

0.04

1.08

0.51

.....

1.25

0.28

0.77

43.83

19.84

15.91

-8.14

7.61

-12.13

-14.83

-1.10

-10.87

-5.91

-1.84

-9.55

-12.58

21.41

-0.58

-32.86

-0.86

2.78

-2.15

-5.25

18.09

-12.50

-13.17

-6.73

-11.56

-4.49

-1.41

-43.91

29.45

18.01

16.44

-6.86

6.34

-10.23

-13.27

-2.40

-10.73

-5.62

0.89

-9.12

-5.29

25.27

-0.95

-27.50

-1.67

0.87

-0.27

-4.73

16.02

-11.98

-12.68

-5.51

-10.55

-4.85

-2.86

-29.27

28.33

5.60

-8.13

-7.82

11.54

-8.69

-8.36

0.22

-9.62

-7.38

-3.75

-9.55

-27.40

-2.95

-0.33

-20.69

-1.24

-0.03

-2.15

-5.04

-3.54

-8.84

-13.15

-1.63

-11.56

-0.39

8.94

-5.70

3.31

7.00

-7.00

-8.32

10.14

-8.96

-12.38

0.24

-6.63

-8.09

1.44

-9.12

-22.59

-2.24

-1.33

-19.23

-1.78

1.06

-0.27

-3.74

3.36

-9.96

-17.86

-1.20

-10.55

0.08

1.39

6.98

6.52

Exports of Goods ( US$ Billion) Current Account Balance(As % of GDP)

EstimatedShortfall After CrisisAfter Crisis Before CrisisBefore Crisis

2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p)

18

Source: AEO 2009 Projections. World economic outlook Database, October 2008;Notes: Data for Zimbabwe, Somalia, Sao Tome, Guinea Bissau, Eritrea and Comoros are not available.Negative shortfall implies a surplus position. (p) Projections

Madagascar

Malawi

Mali

Mauritania

Mauritius

Morocco

Mozambique

Namibia

Niger

Nigeria

Rwanda

São Tomé & Príncipe

Senegal

Seychelles

Sierra Leone

Somalia

South Africa

Sudan

Swaziland

Tanzania

Togo

Tunisia

Uganda

Zambia

Zimbabwe

AFRICA

1.78

1.00

1.76

2.17

2.72

21.52

2.93

3.58

1.03

89.08

0.26

0.00

2.83

0.41

0.40

.....

96.12

13.15

1.74

2.77

0.96

22.02

1.91

5.76

.....

634.56.

2.87

1.11

1.78

2.08

2.85

22.71

3.05

3.65

1.19

99.47

0.29

0.00

2.97

0.42

0.45

.....

101.82

158.23

1.80

3.10

1.05

24.55

2.05

5.62

.....

691.95

1.05

0.69

1.81

1.50

2.30

17.11

2.39

2.32

0.54

50.40

0.22

0.00

1.67

0.39

0.44

.....

68.25

7.64

1.53

2.21

0.77

16.99

1.79

2.73

.....

383.17

1.24

0.72

1.73

1.49

2.38

19.13

2.94

2.49

0.58

855.31

0.25

0.00

1.71

0.40

0.48

.....

70.84

8.82

1.64

2.23

0.80

18.60

1.82

3.00

.....

414.45

0.73

0.31

-0.06

0.66

0.42

4.41

0.55

1.25

0.49

38.68

0.05

0.00

1.17

0.02

-0.04

.....

27.87

5.51

0.21

0.56

0.20

5.03

0.13

3.04

.....

251.24

1.63

0.39

0.05

0.59

0.48

3.58

0.11

1.16

0.61

44.16

0.04

0.00

1.26

0.02

-0.03

.....

30.98

6.41

0.17

0.87

0.25

5.95

0.23

2.62

.....

277.25

-21.15

-5.40

-6.92

-2.97

-6.58

-0.34

-13.27

12.41

-20.56

0.61

-12.43

-34.49

-11.44

-35.11

-4.18

.....

-8.15

-6.73

-2.02

-9.97

-8.48

-3.46

-5.83

-6.60

.....

1.90

-9.68

-6.42

-6.59

-11.23

-5.72

-0.79

-13.05

10.20

-22.52

-0.50

-11.47

-33.44

-12.10

-38.40

-4.29

.....

-8.33

-6.80

-2.64

-9.74

-7.13

-3.29

-6.17

-7.00

.....

1.56

-21.03

-2.82

-0.95

-13.18

-6.14

-1.97

-14.02

2.69

-15.40

-9.05

-5.87

-34.49

-8.72

-21.54

-4.37

.....

-6.36

-13.83

15.38

-9.69

-1.08

-3.23

-7.30

-17.01

.....

-4.37

-22.90

-5.88

-3.67

-14.52

-6.37

-3.15

-11.22

1.42

-16.30

-6.44

-6.23

-33.44

-9.76

-20.03

-4.55

.....

-7.64

-15.86

7.94

-10.43

-2.19

-2.53

-8.90

-17.28

.....

-4.12

Exports of Goods ( US$ Billion) Current Account Balance(As % of GDP)

EstimatedShortfall After CrisisAfter Crisis Before CrisisBefore Crisis

2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p) 2009(p) 2010(p)

19

Table 3: Selected projects expected to be cancelled or postponed

Country Detail on project

Algeria

Burkina Faso

Ethiopia

Ghana

Guinea

Sierra Leone

Sudan

Tanzania

Tunisia

Uganda

In December 2008 the Government postponed the date of submissionof tenders for the modernization of Skikda and El Harrach refineries to1Q 2009. These projects could be delayed.

Out of six mines scheduled to start in 2009 three mining companiesare having difficulties mobilizing funds needed to begin operations.

Private financing of Gilgel Gibe Hydro III Project to fill the financinggap is in danger. JP Morgan had earlier expressed interest but haswithdrawn due to the crisis.

Attempted sale of Volta Aluminum Company Limited (VALCO), an alu-minum smelter, collapsed due to withdrawal of the Brazilian consor-tium from the deal

Investments delayed in mining projects

Construction projects may be delayed

Petronas decided to put its Port Sudan refinery project on hold.

Rio Tinto and Vodacom have postponed investments in mining pro-jects

Hasdrubal gas project and Enfidha deep sea port project are likely tobe delayed

14 medium scale companies closed in 2008 and 15 more expected toclose in 1Q 2009, Government will divert money from planned roadprojects to other sectors.

20

Table 4: Crisis mitigation strategies in selected countries

Countries Mitigating Measures by Government

Botswana

Cape Verde

Egypt

Kenya

• The Central Bank cut its bank rate by 50 basis points to 15% in December2008.• In the face of uncertainty as to the duration of the global economicslowdown, the cushion provided by the foreign exchange reserves may notbe sufficient; some increase in borrowing is expected

Reductions in spending targeting not only the development budget, but also some recur-rent expenditure items, such as personnel emoluments and the cost of travel.

• Dialogue with the IMF which adjusted the criteria of performance of the PSI• Careful management of the interest rates and the budget

Development of the Treasury bills to encourage the saving to remain in the national finan-cial system.

• Egyptian Government has announced a number of crisis mitigatingmeasures:- Ministry of Trade & Industry EGP7 billion to boost exports and localproduction

- Crisis package for tourism sector, including tax-exemption for charterflights, offering of free nights in hotels, etc

- Establishing deposit insurance fund (to boost confidence in bankingsector)

- Parliament approved legislation on integrated supervision of non-bankfinancial sector (i.e., capital market, insurance, mortgage finance, financialleasing, and factoring) in January

- 2nd phase of the Financial Sector Reform Program, with expected joint ABD-WorldBank financing, discussed between the Prime Minister, the Minister of Investment,and the Governor of the Central Bank in January. Program at strengthening role ofthe financial sector by expanding the volume of bank lending, and enhancing SME’saccess to credit.

Egyptian Central Bank cut its benchmark interest rate for the first time since April 2006.The overnight deposit rate was lowered 100 basis points to 10.5%, while the lendingrate was cut by the same amount to 12.5%.

• The Central Bank reduced the threshold for investments in Treasury Bills in the primarymarket from the current Kshs 1 million to Kshs 0.1 million from January 2009 to inducesmall investors.

• The Kenyan government issued infrastructure bond that amounted to 18.5 billionshilling (USD 232.6 million) with 12-year maturity in February 2009.

21

Countries Mitigating Measures by Government

Liberia

Mauritius

Morocco

Nigeria

• Nothing dedicated specifically to the crisis.• Vigilance on BoP (remittances and level of reserves).• Government is making a comprehensive revision of its Revenue Code which proposesa 10% reduction of corporate and income tax rates in a bid to stimulate economicgrowth.

Government is planning to cut the regional trade tariff from 1% to 0.75% to acceleratetrade within ECOWAS.

Government announced in January 2009 a stimulus package to bolster economic growth,increase jobs and boost purchasing power as a response to the global financial crisis. Thepackage will provide Mauritian Rupees 10.4 billion, equivalent to about 3% of GDP.

• In a bid to stimulate trade, the Moroccan government has taken a series of measuresto re-energize the markets:- Allowing companies to buy back their own shares without a minimum set price in theevent that their share prices drop below a certain level.

- The possibility for insurance companies to hold up to 60% of their listed shares tocover their liabilities, as opposed to the previous ceiling 50%.

• The 2.8 trillion naira (22.6 billion dollar) 2009 budget submitted to the NationalAssembly is noticeably heavy on recurrent expenditure and light on capital spendingand investment. The government is now mulling to use its USD 52 billion externalreserves to shore up the economy through a stimulus package.

• Launch of a Presidential Steering Committee on the Global Economic Crisis inJanuary 2009. The Committee is responsible for developing a framework to respond tothe global crisis.

• Nigeria and Dubai signed in January 2009 a memorandum of understanding worthUSD 16 billion for infrastructure investments.

• Government announced plan to suspend the 5% excise duty on some goodsmanufactured such as juices, instant noodles and non-alcoholic drinks, aiming tosupport its stressed industry and avert job losses.

• Government decided to inject N70 billion into the wobbly textile industry throughguarantees in February 2009.

• Nigerian government imposed foreign exchange controls to stem the slide in theNaira. These measures include:- All foreign exchange purchases from the central bank window are only to be used forcustomers, and not on the interbank foreign exchange market.

The net open foreign exchange position of banks is reduced to 1% of shareholders’ funds,down from 20% in mid-December 2008.

22

Countries Mitigating Measures by Government

South-Africa

Sudan

Tunisia

Uganda

• The recent Presidential State of the Nation address (6th February, 2009) has takennote of the impact of the ongoing financial crisis to the economy. The government hasflagged measures underway to avert the crisis that include:- Increased funding for public investment projects with allocation of R 690 billion(about USD 80 billion) over the next three years;

- Intensification of public sector employment programs;- Adoption of industrial financing and incentive instruments to assist firms in distress,and lastly;

- Sustained and expansion of government social expenditure.- Financing of these measures is informed to include support from developmentfinance institutions as well as partnership with the private sector- Proposed tax adjustments to personal income tax providing middle and lowerincome earners with R13.6 billion in tax relief.

• The South African Reserve Bank cut the repurchase rate, its benchmark interest rate,by 100 basis points to 10.5%, the biggest reduction in more than five years.

• The Regional Government of Southern Sudan has ordered a 10% salary cut for allsenior government officials and a clampdown on the payment of hotel costs for officialswho do not have their own housing.

• Tunisian Government has taken a number of steps in view of the financial crisis:- a Commission to ensure crisis surveillance has been established- 2009 budget includes a significant increase in public investments along withmeasures to increase external competitiveness and employment and strengthensocial protection

• Central Bank relaxing monetary policy stance, with Dinar money market rate fallingfrom about 5.2% in December to 4.65% in January 2009

Central Bank reduced its key interest rate by 75 basis points, from 5.25% to 4.50% inFebruary 2009.

• Government has assisted the troubled Uganda Transport Operators and DriversAssociation (Utoda) by writing off nearly half of the accumulated Shs1.7 billion debt thatit owes Kampala City Council (KCC).

23

Other Publications in the SeriesN° 1/2008 : The Current Financial Crisis: Impact on African Economies, November 2008.

N° 1/2009 : Impact of the Financial Crisis on African Economies - An Interim Assessment,January 2009.

N° 2/2009 : Preventing a Credit Crunch in Africa : The Role of Financial Regulation,January 2009.

N° 3/2009 : Africa’s Voice, Representation and Effective Participation, January 2009.

N° 4/2009 : Trade, Investment and Domestic Resource Mobilization, January 2009.

N° 5/2009 : Commodities, Export Subsidies, and African Trade during the Slump, February2009.

N° 6/2009 : What can the G20 do with trade to benefit Africa?, February 2009.

N° 7/2009 : An Update on the Impact of the Financial Crisis on African Economies, March2009.