THE GLOBAL FINANCIAL CRISIS: IMPACT AND RESPONSE OF THE REGIONAL COMMISSIONS

Impact on ECA activities

Most of the discussions on policy responses to the current global financial crisis have thus far focused on national and international actions. The regional and sub-regional dimensions are missing. Yet they are of immense importance, especially in light of the limited capacity of many African countries to tackle this issue. Against this background, the ECA, the African Union Commission (AUC) and the African Development Bank (AfDB) have taken several actions to assist African countries in dealing with the effects of the crisis. For example, ECA in collaboration with the AUC and the AfDB organized a High-Level Forum on the Financial Crisis for Ministers of Finance and Planning and Governors of Central Banks in Tunis on 12 November 2008. The Communiqué issued at the end of the meeting outlines measures to be taken at the national, regional, and international levels to mitigate the effect of the crisis on African economies. A follow up meeting involving development partners was also organized during the just concluded Doha Review Conference on Financing for Development. The ECA has also provided research support to African countries on the Financial Crisis. For example, it prepared papers on the Impact of the Financial Crisis on Africa and on the Reform of the International Financial Architecture which formed the basis for discussions by African Ministers and Central Bank Governors at their meeting in Tunis. ECA will strengthen its advisory role by helping African countries harness potential natural resource revenue, and prudently using such resources for sustainable growth and development. In addition, it will continue to provide technical assistance to enable African countries build capacity for policy design and implementation, including deepening economic reforms. ECA will also help African countries reduce their vulnerability to external shocks by providing support in the development of productive capacities. This will enable them to diversify their exports and production, thus increasing their resilience to external shocks. The Tunis meeting also mandated ECA and the African Union Commission to put the issues of fiscal policy and domestic resource mobilization on the agenda of their next Joint Conference of Ministers of Finance. ECA also serves on the Secretariat of a Committee of Ten African Ministers of Finance and Governors of Central Banks established at the Tunis Meeting to articulate Africa's positions on the reform of the international financial architecture.Since the onset of the crisis Member States have increased their demand for technical assistance and support to enable them cope with the potential effects of the crisis. These requests cover three key clusters: research support; advisory services and advocacy; and facilitating African consensus on policy responses to the crisis. One of the areas where Member States of ECA have a keen interest is in the reform of the international financial architecture. In recognition of this, ECA has made appropriate provisions in our current as well as the 2010-2011 biennial work programme to enable us to provide technical assistance to African countries in this area.4 ECA has conceptualized a Regional Forum on Financing for Development to enable African countries address the challenges that they likely to face from future declines in development finance as a result of the effects of the financial crisis. Finally, a meeting on Financing for Development and Fiscal Policy is planned in February 2009 to enable African countries to examine alternative sources of development finance and the role of fiscal policy in harnessing resources from these sources.download