Africa finance chiefs vow transparency on investment
by Daniel Magnowski and Vincent Fertey

Reuters    Translate This Article
2 August 2008

NOUAKCHOTT, Mauritania (Reuters) - African members of the International Monetary Fund pledged greater transparency in their dealings with China and other new investors leading a tide of money flowing into the continent, the African Caucus said in a statement on Friday.

Finance ministers and central bankers from the world's poorest continent issued the draft statement after meetings with the IMF and World Bank on the role of non-traditional donors, of which China is by far the largest.

'African governors urged African countries to commit to ensure transparency in the negotiation of the financing agreements and in the use of resources, and make information on loans and grants from all sources available,' the statement said.

The declaration in Mauritania is intended to be a set of guidelines for African countries in their agreements with China and other so-called non-traditional sources of finance.

China, Brazil and India have been tying up infrastructure or loan deals in African countries, often in return for oil, metals and other commodity resources, raising concerns among traditional lenders like the IMF and World Bank.

'It's good news that there are new sources of financing, but we have to be very careful in order that this new financial help does not destroy the original policies of the Bretton Woods institutions that aim to cancel debt,' IMF Managing Director Dominique Strauss-Kahn told Reuters in an interview during the meeting.

The IMF has said it must examine the implications of a $9 billion deal between China and the Democratic Republic of Congo before deciding on its own debt relief package for the Central African country.

Besides loans, deals with China often involve Chinese workers building roads and other infrastructure projects, while natural resources move the other way, in some massive deals.

However, while welcoming the new money, the African leaders stressed the importance of developing local skills and industries beyond the simple extraction and export of raw materials.

The caucus urged new development partners to 'emphasise, in their investment projects, value addition, knowledge transfer, and the capacity building aspects of development assistance.'

CHINA TO BOOST FARM INVESTMENT

The China Development Bank said it was 'anxious' to work in agriculture and plans further farming investments on the continent, where it has granted loans worth several hundred million dollars, mostly to processing companies in East Africa.

'(The) China Development Bank is willing to share its experience and provide financing to agricultural development in Africa,' Governor Chen Yuan told the Caucus.

Yuan said that in the current food and fuel crisis, Africa should make agricultural development its 'top priority.'

Despite rising prices for many of Africa's commodity exports in recent years, many economists worry countries who have benefited from huge debt forgiveness packages risk plunging into a new round of unsustainable borrowing from new lenders eager to secure access to oil and minerals.

'A big concern is debt. Lots of debt has just been wiped out, and now with China coming, are we going to see a new cycle?' asked one delegate.

Opposition politicians and anti-graft groups in Niger have criticized the lack of transparency surrounding a deal between the government and China's state oil company CNCP which could be worth $5 billion to one of the poorest countries on earth.

But Ousmane Kane, the President of the Caucus, said African countries, rather than lenders, must be responsible for fully assessing the future obligations to which they commit by accepting loans from new sources.

Copyright 2008 Reuters. Reprinted with permission from Reuters. Reuters content is the intellectual property of Reuters or its third party content providers. Any copying, republication or redistribution or Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. Reuters and the Reuters Sphere Logo are registered trademarks of the Reuters group of companies around the world. For additional information about Reuters content and services, please visit Reuters website at www.reuters.com. License # REU-4198-JJM.



Translation software is not perfect; however if you would like to try it, you can translate this page using:

(Google) Select a language English to Afrikaans English to Albanian English to Arabic English to Belarusian English to Bulgarian English to Catalan English to Chinese (Simplified) English to Chinese (Traditional) English to Croatian English to Czech English to Danish English to Dutch English to Estonian English to Filipino English to Finnish English to French English to Galician English to German English to Greek English to Hebrew English to Hindi English to Hungarian English to Icelandic English to Indonesian English to Irish English to Italian English to Japanese English to Korean English to Latvian English to Lithuanian English to Macedonian English to Malay English to Maltese English to Norwegian English to Persian English to Polish English to Portuguese English to Romanian English to Russian English to Serbian English to Slovak English to Slovenian English to Spanish English to Swahili English to Swedish English to Thai English to Turkish English to Ukrainian English to Vietnamese English to Welsh English to Yiddish

(Altavista babelfish) Select a languageEnglish to Chinese-simpEnglish to Chinese-tradEnglish to DutchEnglish to PortugueseEnglish to FrenchEnglish to GermanEnglish to GreekEnglish to ItalianEnglish to JapaneseEnglish to KoreanEnglish to RussianEnglish to Spanish

Send Good News to Global Good News.

Your comments.