Identifier
Created
Classification
Origin
09DARESSALAAM175
2009-03-17 14:01:00
UNCLASSIFIED
Embassy Dar Es Salaam
Cable title:  

IMF-AFRICA MEETING IN TANZANIA ADDRESSES GLOBAL FINANCIAL

Tags:  EAID ECIN ECON EFIN EIND TZ 
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UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000175 

SIPDIS

DEPARTMENT FOR AF/E JLIDDLE; INR/RAA FOR FEHRENREICH; AF/EPS
STATE PASS USAID, USTR

E.O. 12958: N/A
TAGS: EAID ECIN ECON EFIN EIND TZ
SUBJECT: IMF-AFRICA MEETING IN TANZANIA ADDRESSES GLOBAL FINANCIAL
CRISIS

DAR ES SAL 00000175 001.2 OF 002


UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000175

SIPDIS

DEPARTMENT FOR AF/E JLIDDLE; INR/RAA FOR FEHRENREICH; AF/EPS
STATE PASS USAID, USTR

E.O. 12958: N/A
TAGS: EAID ECIN ECON EFIN EIND TZ
SUBJECT: IMF-AFRICA MEETING IN TANZANIA ADDRESSES GLOBAL FINANCIAL
CRISIS

DAR ES SAL 00000175 001.2 OF 002



1. Summary. Tanzania and the IMF jointly hosted a March 10-11
conference focused on minimizing the effects of the global economic
crisis in Africa to preserve recent hard-won economic and political
gains. Panelists included President Kikwete, IMF Managing Director
Dominique Strauss-Kahn, and Kofi Annan, among others. UN Deputy
Secretary-General (and former Tanzanian FM) Asha-Rose Migiro
delivered one of the key speeches. Senior officials from more than
50 countries, mostly African, and 20 regional and multilateral
organizations attended, along with numerous NGOs, academics, and
activists. Key messages from the conference included calls for
developed countries to meet their commitments to Africa and for a
greater African voice in plans to confront the global crisis. End
summary.

2. Numerous speakers called on the international donor community to
deliver on previous aid promises, such as those made at the 2005
Gleneagles G8 Summit, in order to protect the important economic
gains made in Africa over the last decade. UN DSyG Migiro said that
the promise to double aid to Africa - amounting to some $62 billion
in nominal terms - seems attainable when compared to the trillions
of dollars that have been committed to stimulus packages in the
developed world. President Kikwete urged developed countries to
consider a stimulus package for Africa noting that Tanzania is
witnessing a precipitous decline in prices of export commodities -
the price of cotton was down nearly 50 percent from a year ago,
while the price of Arabica coffee had fallen 34 percent since the
end of 2008. Kikwete also noted that foreign investors are delaying
or cancelling projects; he cited Tanzanian examples of a proposed
USD 3.5 billion investment in aluminum smelting and a proposed USD
165 million nickel mining and extraction project, both of which had
been postponed. (Note: Planning for the aluminum smelter was in its
very early stages.)


3. A second theme was the need for increased African representation

at the IMF and within the global economic dialogue in general.
President Kikwete called on the IMF to assist African countries in
making their voices heard in G8 and G20 meetings. He also supported
a statement - read at the meeting by Ivory Coast Minister of Economy
and Finance Charles Diby - that one deputy IMF Managing Director be
from Africa. Dr. Migiro pointed out that the timing of the meeting
was fortuitous since the G20 are due to meet in London in April.
Activist Bob Geldof got an approving laugh from the audience when he
advised President Kikwete that African leaders should avoid
international meetings if they could not make their voices heard.


4. Discussants also highlighted the role of developed countries in
precipitating the global financial crisis and suggested increased
international oversight. Businessman and philanthropist Mo Ibrahim
was quoted in a local paper saying, "What has happened is a failure
of governance in the developed countries, the same people who have
been preaching governance to Africa." In his address, President
Kikwete declared, "There should be no untouchable countries when it
comes to financial impropriety and lack of effective regulatory
framework because its consequences affect all of us."


5. Finally, panelists stressed that the impact of the global
downturn would be particularly severe in Africa. IMF Managing
Director Dominique Strauss-Khan referenced a World Bank estimate
that more than 50 million people in Lower Income Countries, the
majority of whom live in Africa, could be "thrown back into absolute
poverty - with obvious consequences for other social ills, like
sickness and infant mortality." He noted the threat of civil unrest
and even war. World Bank Managing Director Ngozi Okonjo-Iweala
stated that the crisis, "could not have come at a worse time for
Africa," referencing the recent gains that she feared will now "come
to a grinding halt."


6. The result of the meeting, a Joint Declaration by African
countries and the IMF, underlined the following six "building
blocks" of enhanced partnership between Africa and the IMF:
-- enhancing IMF surveillance over the policies of all its members,
in a spirit of evenhandedness;
-- expanding the IMF's financing facilities and their accessibility
to low income countries;
-- consolidating the debt relief process by adjusting the IMF's debt
sustainability framework to accommodate Africa's new financing needs
and opportunities;
-- accelerating reforms of IMF governance to enhance Africa's voice
and representation at all levels of the institution;
-- enhancing the policy dialogue between the IMF and its African
members, including through technical assistance, to ensure that
African countries' policies benefit from the IMF's experience and

DAR ES SAL 00000175 002.2 OF 002


expertise;
-- and reinforcing the IMF's catalytic role to leverage public and
private financing for Africa's critical infrastructure needs.


7. The Tanzanian Government recently announced the formation of a
Task Force to develop a national plan to address the impact of the
global crisis on Tanzania. However, neither the members of the Task
Force nor its agenda have yet been made public.


ANDRE