Africa Should Cut Reliance on Commodity Exports—Ministers

Global crisis spread to Africa through impact on its commodity exports

So Africa’s economic strategy going forward should be to diversify

Ministers welcome “new energy” in Africa arising from greater political stability

Four ministers told a press briefing that diversification into more labor-intensive industry would make Africa’s growth less volatile and more inclusive.

Lesotho’s Finance Minister, Timothy Thahane, told reporters that the global financial crisis had spread to Africa through the impact on its commodity exports. A lesson to the continent from the global crisis had been that job creation had suffered from volatility in the commodities sector.

“Africa’s economic strategy going forward should be to diversify—that is the challenge for all of us,” Thahane said. “You cannot create jobs in a declining economy. Our focus must be on long-term, high, sustainable growth; the creation of jobs; and on social provision.”

Swaziland’s Thahane: “Africa’s economic strategy going forward should be to diversify—that is the challenge for all of us” (photo: Cliff Owen/IMF)

Chad’s Finance Minister, Gata Ngoulou, noted that Africa typically exports raw materials that are processed elsewhere. “So we cannot count on commodity exports as a proper base for our economies,” he stated. “If export prices are good, we grow. But we all know what happens when prices drop.”

‘Not inclusive growth’

Zimbabwean Finance Minister Tendai Biti said the problem with Africa’s growth is that it is not inclusive growth. He noted that the mainstay of Zimbabwe’s economic growth is mining. “But this growth is a byproduct of the commodities boom that will not touch the peasant farmer in the corner of the country. It needs to be translated into growth with jobs,” he stated.

Chad’s Ngoulou: “ … we cannot count on commodity exports as a proper base for our economies” (photo: Cliff Owen/IMF)

Togo’s Finance Minister, Adji Otteh Ayassor, said his government planned to pay special attention to investment in infrastructure. “We want to expand our port facilities to respond to ever-growing demand. We will have to build capacity in transportation.” He said boosting infrastructure investment was particularly important for landlocked countries that needed to move products to market.

Biti called for a new development model for Africa. “Most of our economies depend on agriculture or mining—there is little manufacturing or processing … this is a debate that we should start now,”...