‘Financial crisis may erode economic gains’

‘Financial crisis may erode economic gains’
Written by Maluba Jere
Saturday, November 22, 2008 11:47:

UNITED Nations secretary general Ban Ki Moon said there is a clear risk that the recent improvements in social and economic indicators could be eroded or reversed due to the global financial crisis.

In his message to mark this year’s Africa Industrialisation day which fell yesterday (November 20) under the theme ‘Processing of Raw Materials for Sustainable Growth and Development’, Ban said the accelerating impacts of challenges such as climate change were becoming more apparent, saying although the full impacts of these crises are not yet known, some of the effects were already being felt.

“This year’s observance of Africa Industrialisation Day takes place at a challenging time. We face a global financial crisis. Food and fertiliser prices are significantly higher than they were two years ago,” he said.

Ban emphasised that the ability to process raw materials into high value added goods was essential. He noted that industrialisation had led to broad-based development and economic transformation in other parts of the world saying it can and must do the same in Africa.

“On this Africa Industrialisation Day, let us pledge to do our utmost to strengthen African industry so that it can play its rightful, catalytic role in sustainable economic growth and the eradication of poverty,” Ban said.

Ban has since warned that the global economy will hit exporters of primary products hard as they account for more than 50 per cent of the value of Africa’s exports.

“This makes the continent especially vulnerable to global economic shocks,” he said.

“It is essential for Africa to be able to process its raw materials into higher-value products, both for domestic consumption and for exports. Malaysia and Thailand, for example, are among the countries that have progressed rapidly by moving into processing their primary and mineral products into high-value-added products.”

He observed that more than half of Africa’s people were employed in the agricultural sector, adding that the development of the agri-business and agro-processing industries was essential.

“In many cases, domestic markets already exist for these products. There is also great potential for links with other sectors of the economy, which would provide opportunities for employment and economic growth,” said Ban.