Forthcoming ERA 2009 calls for big-push on agriculture.

Joint Press Release

Addis Ababa, 22 May 2009 (ECA) - The global economic crisis will hit African economies hard during the course of 2009, according to the forthcoming Economic Report on Africa 2009. The report, jointly published by the United Nations Economic Commission for Africa (ECA) and the African Union Commission (AU), will be launched on Thursday May 28. The theme of this year’s report is:  “Developing African Agriculture through Regional Value Chains.”

The impact of the global financial crisis and economic recession has already resulted in lower demand for Africa’s export and a sharp decline in commodity prices. At the same time, a projected decline in capital inflows to Africa, including aid, foreign direct investment and remittances will, accentuate the impact of the global credit crunch.

The report notes that all major industrialized countries have pumped the equivalent of billions of dollars into their economies to support struggling firms and stimulate demand for goods and services.  However, African countries do not have the resources to support their economies even though they are also feeling the pains of economic recession.  This is alarming as many people will fall back into poverty, making the Millennium Development Goals even harder to attain.

To mitigate the impact of the evolving crisis, African countries need sound domestic policies as well as continued aid flows and targeted financing facilities from international financial institutions. 

The report calls for special attention to agriculture, since Africa is heavily dependent on this sector for providing employment, generating economic growth, foreign exchange earnings and tax revenue.  “Modernising agriculture is crucial to development and industrialisation in Africa, to food security, sustained poverty reduction and integration of Africa in the global economy”, it says.

ERA 2009 points to the Comprehensive Africa Agriculture Development Programme (CAADP) of the African Union.  In the framework of the CAADP, it points to a strategy that creates regional value chains that link agriculture to other sectors of the economy as the best way to initiate and sustain development in Africa.  These value chains will include forward and backward linkages, from agribusinesses, agro-processing, ethanol production, other industrial processes to soil management, high-yielding seed varieties, fertiliser production, etc.

The report also strikes an optimistic note: with sustained economic reforms, exchange rate adjustment, easing of inflation and efforts to revive domestic demand would contribute to low but still positive growth rates in some African countries in 2009.

Background:
The Economic Report on Africa (ERA) is an annual publication of the African Union Commission and the United Nations Economic Commission for Africa (ECA). It provides a comprehensive analysis of developments in African economies over the preceding year, and makes predictions about the following year.  The report also gives an overview of the global economy.  Each year part two of ERA tackles a thematic area of importance to Africa. The theme of ERA 2009 is: “Developing African Agriculture through Regional Value Chains.”  The report will be launched at the United Nations Conference Centre in Addis Ababa, Ethiopia on Thursday 28 May at 10:00 am.  It will then be widely available in print and can be downloaded from www.uneca.org/era and www.africa-union.org

jointly issued by:
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and

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