Ethiopian PM foresees more economic woes for Africa

meles_zenawi1ADDIS ABABA (AFP) – Africa is unlikely to see a let up in economic woes next year mainly due to depressed commodity earnings and high energy costs, Ethiopian Prime Minister Meles Zenawi warned on Tuesday.

“We seem to be destined to face all the negative consequences of 2008 and 2009 without any of their limited benefits for the foreseeable future,” Meles said.

Meles told a UN-organised pan-African conference of experts and government officials from 45 countries examining the impact of global economic downturn that the crisis would create “uniquely unfavourable” conditions.

He said “very high and growing oil prices” coupled with perhaps similar growth in food prices combined with weak commodities prices would point to a “generally depressed growth prospect”.

In May, the UN Economic Commission for Africa (UNECA) said Africa’s growth rate would slow to a 20-year low of two percent in 2009, in contrast to the 5.1 percent rate achieved in 2008 and six percent the previous year.

Climate change, Meles warned, was likely to hit hard Africa’s fragile agriculture sector and further depress the prospects of growth.

According to the United Nations Development Programme (UNDP)’s official Helen Clark “no continent is as dangerously vulnerable as Africa” to climate change.

Before the global crisis, the continent was home to some of the world’s fastest expanding economies.

But the UNDP, which organised the Addis Ababa gathering, said signs of hard times were already evident with Africa’s traditional export giants beginning to feel the pinch of falling prices and lower demand.

In the diamond-rich Katanga province of the Democratic Republic of Congo, 60 percent of enterprises have shut shop laying off more than 300,000 workers.

In South Africa, over 5,000 workers lost their jobs in February this year alone.

The continent’s economic powerhouse released figures last month that showed it had entered its first recession since apartheid as the global crisis pounded demand for its main exports.

Liberia‘s rubber exports — its main source of revenue — declined to 88,000 tonnes last year from 135,000 tonnes the previous year due to slowing demand. UNDP predicts the west African state could see a further decline in 2009 and 2010.

Meles said the international community was obliged to compensate Africa for the “damage caused by global warming“.