Africa to look for ways to weather economic crisis

By AFP

July 15, 2010 Updated Jun 9, 2009 at 2:01 AM CDT

African political and business leaders will look at ways for the continent to weather a global economic crisis that has snuffed out years of strong growth at the World Economic Forum on Africa opening Wednesday.

"It's an opportunity to assess what is happening globally, the effect for our major economies and the steps that are required in the short and long term to deal with the changing dynamic that is occuring globally," said Katherine Tweedie, director of the meeting.

Five national leaders will be among the 800 delegates to the June 10-12 Forum in Cape Town, including South African President Jacob Zuma, Rupiah Banda of Zambia and Paul Kagame of Rwanda.

At the last gathering one year ago, many African countries were optimistic about their economies. The continent had posted growth of more than 5.0 percent for the last five years, due largely to surging demand for raw materials that led to record commodities prices.

That's all changed now, as the global downturn has slashed demand for raw materials, leaving many export-dependent countries in a pinch.

The United Nations said last week that Africa's growth rate would likely hit a 20-year low of two percent in 2009.

South Africa, the continent's biggest economy, has slipped into its first recession in 17 years, with thousands of jobs already lost this year, mainly in the crucial mining sector.

"Compared to where we were this time last year, then I think that a lot of people are coming to the summit because they want to know what is happening," Tweedie said.

"What steps do you take as a leader in your own business when you are short of capital and there's no financing (and) is Africa a safe place to invest right now," she told AFP.

Falling demand for natural resources, the main export for much of Africa, will take centre stage at the Forum, along with talks on foreign investment and agriculture.

Half of the delegates work at banks, especially in Nigeria, or in big corporations, and are to discuss "what business can do to be part of the solution," said Adeyemi Babington-Ashaye, deputy director of WEF on Africa.

More generally, the talks will also focus on building ties with businesses from the United States, Europe and the Middle East.

China will also loom large as a major investor across the continent, with Jiang Jianqing, head of the Industrial and Commercial Bank of China, attending.

Zimbabwe's new Finance Minister Tendai Biti will also make a special pitch to lure business back into the country, where a unity government took office in February in a bid to end a decade of political and economic problems.

And with the football World Cup just one year away, the Forum will also devote a special session to the games, as South Africa prepares to kick off the curtain-raiser Confederations Cup just two days after the business meeting ends.

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