On the road to peace and economic recovery.

On the road to peace and economic recovery

African Governments assisted by international financial institutions are making a determined effort to undertake needed economic reforms, but additional financial support is essential if they are to succeed, an Advisory Group on Financial Flows to Africa reported on 22 February.

A team of 13 eminent financial experts, headed by Sir Douglas Wass, former Permanent Secretary of the United Kingdom Treasury, was appointed by Secretary-General Perez de Cuellar in April 1987 to examine the external flows of resources to Africa and to recommend ways and means to ensure that the resource flows are adequate for the successful implementation of the United Nations Programme of Action for African Economic Recovery. They submitted their report two days after Mr. Perez de Cuellar returned from a 10-day visit to six African countries, during which African economic problems were extensively discussed with African leaders.

Among major recommendations of the report, entitled Financing Africa's Recovery:

. That sub-Saharan African obtain a minimum of $5 billion a year in additional financial resources to cope with its current economic plight.

. That many countries acquire debt releif that goes beyond the scope of traditional debt rescheduling arrangements.

The Group was hopeful that new initiatives by the world Bank, the International Monetary Fund (IMF) and the African Development Bank would provide Africa with about $3 billion more, leaving an annual $2 billion shortfall.

For countries with no prospect of becoming credit-worthy in the foreseeable future, the Advisory Group urged that official creditors reschedule all principal and interest due over the next three years at very low rates of interest. In addition, concessional finance should be made available to countries facing an insurmountable burden in servicing their debts to the World Bank and IMF, it said.

Commercial banks, which account for a fourth of sub-Saharan Africa's total external debt of over $100 billion, should also take special debt-relief measures on behalf of hard-pressed sub-Saharan countries, the Group said. It recommended that in one or more suitable countries, debt be converted into long-term securities at reduced rates of interest.

Donor countries could also consider using aid funds to help African countries purchased their own debt when commercial banks are prepared to dispose of their claims at a steep discount on the secondary market, the expert stated.

The Advisory Group acknowledged that the extra financial support asked from the developed world was "not trivial." But, despite budgetary pressures in many donor countries, the sums contemplated were small in relation to the gross domestic product of the developed world and in relation to its public spending, the Group said.

Secretary-General visits six African nations

Leaders of six African nations expressed great anxiety over the continent's economic situation in meetings with Secretary-General Javier Perez de Cuellar in February during his first visit to Africa since the adoption in 1986 of the UN Programme of Action for African Economic Recovery.

Heads of state of Ghanna, Cameroon, Gabon, Congo, Zaire and Angola informed Mr. Perez de Cuellar of measures being taken for policy reforms and structural adjustments, often involving "great social sacrifice" and resulting in serious domestic crises.

His spokesman reported: "The Secretary-General is convinced that in all the countries which he visited, and indeed for most of Africa, unless adequate and timely support is given to domestic efforts for structural reforms by the international community, the economic and social situation will deteriorate further. Frustration and discouragement could well set in."

Mr. Perez de Cuellar appealed to the international community, particularly major donor countries, "to act boldly and imaginatively in their support for Africa's economic recovery". Africans should not relent in their efforts. "The road to economic recovery may be long and difficult", he said, "but the journey which both the African countries and the international community have embarked upon can and must be completed successfully".

Mr. Perez de Cuellar also visited various economic and cultural projects, including a coffee co-operative in Cameroon, the International Center for Bantu Civilizations in Gabon, and the National Museum of Ngaliema, which houses 40,000 works of Zairian art.

PHOTO : Secretary-General at a coffee

PHOTO : co-operative in Cameroon.