Thursday, February 19, 2009

African countries advised to diversify economies

Source: Xinhua - 10/02/2009

A senior Zambian government official has advised African countries to diversify their economies in view of the global crisis which has resulted in falling commodity prices.

Zambian Vice President George Kunda told a meeting of ministers of Eastern and Southern African countries that it was important to diversify economies in order to cushion the problems of single commodity dependence.

"The current global crisis is affecting us more than we had anticipated. Most of our countries are dependent of single or few commodities and the price of these commodities have fallen drastically over the past six months," he said.

He said most commodities dependent on by most African countries such as copper, oil, platinum coal and iron ore were now fetching less than six months ago.

"Businesses are closing down and our people are losing jobs and their income is being eroded. Because of lower prices, businesses are holding back new investments to safeguard investors' value," he added.

He said African countries must realize that open market policies were no longer optimal.

The ministers are meeting to look at the progress made in the Economic Partnership Agreements (EPAs) currently going on between the African Caribbean and Pacific (ACP) countries and the European Union (EU). Eastern and Southern African countries are negotiating as one group.

Common Market for Eastern and Southern Africa (COMESA) secretary general Sindiso Ngwenya said negotiations at a technical level "have so far been frozen" waiting for political guidance but expressed hope that a resolution would be found.

The ministers are expected to provide guidance as to the process, content and strategy to engage the EU.

The EPAs are expected to replace the existing Contonou Agreement that exists between the EU and the ACP.