2004 Annual Meetings
Gabon and the IMF
Iraq and the IMF
Malawi and the IMF
Nigeria and the IMF
The IMF and Good Governance -- A Factsheet
Heavily Indebted Poor Countries -- A Factsheet
The IMF and the Millennium Development Goals -- A Factsheet
Poverty Reduction Strategy Papers -- A Factsheet
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Transcript of the African Finance Ministers Press Conference
Mr. Goodal Gondwe, Minister of Finance for Malawi
Lucie MBOTO FOUDA: Ladies and gentlemen, good afternoon. I'm Lucie Mboto Fouda from the External Relations Department of the IMF, and I would like to welcome all of you to this press conference of the Ministers of Finance from Africa.
We have here today three Ministers, some of the people who are at the heart of the fight against poverty in Africa and who struggle on a daily basis with debt burden, with the HIV/AIDS pandemic and others, but also with conflicts.
As in the past, they have agreed to spare some of their time to have a chat with you, to discuss issues of importance to you.
Before we go further, I will ask Mr. Gondwe, who is Minister of Finance for Malawi, to offer a few opening remarks. Then I will introduce the rest of the panel, and we can take questions in the room. As usual, at that time we will set up a few housekeeping rules. Thank you very much.
Mr. GONDWE: Well, thank you very much, ladies and gentlemen, and thank you very much for coming. I have just been having a discussion with my Executive Director who preferred to say that I had volunteered to come here. I thought it was quite the other way around, but, nevertheless, there it is.
We have been here now for some time, and although the meetings were opened officially today, we've had a number of very interesting meetings, first with Mr. Wolfensohn, and then with Mr. de Rato, and felt that we gained quite a lot from those meetings. In particular, as far as I was concerned, in both cases I hope I came out with some views on debt sustainability, particularly, where we're going, after the completion point, what can we expect, and issues of that type.
These, as you know, are extremely important for us because the main issues between now and the time of 2015 will be the extent to which we will be able to have attained the Millennium Development Goals, the so-called MDGs. Are we getting there? What do we need to get there? And these are the issues that we'll be talking about.
Of course, within that are issues concerning the status of women that our Chairperson has just been talking about, but many more issues that are involved in the poverty reduction exercise that we are committing ourselves.
So I think that on behalf of my colleagues I could say that already within the last two or three days, we have gained a lot from it. Some of us have attended the Development Committee meeting, which, again, had a number of issues that were very, very relevant to our moving forward in our countries, the IMFC also. And so within a short time, we have gained something, and probably you will wish to ask us about questions on that, and we'll be available to answer those.
Lucie MBOTO FOUDA: Thank you very much, Mr. Gondwe.
Now let me introduce the panel. To my right is Minister Paul Toungui, Ministers of State, Minister of Finance for Gabon, and, of course, Mr. Gondwe, who is a former Director of the African Department at the IMF and now Minister of Finance for Malawi. To my extreme left is Mr. Athanase Gahungu, who is Minister of Finance for Burundi. We have another participant, Mr. Andre Phillipe Futa, Minister of Finance for the Democratic Republic of the Congo. He will join us a little later in the debate.
Now, before you ask your question, could I ask you as usual to introduce yourself and state your affiliation.
QUESTIONER: I'd like one of your panelists to assess what has happened during the meetings on debt forgiveness for poor countries. Secretary Snow said this morning that the United States was determined to reach a solution soon. Chancellor Brown said last night that an innovative way would be found by revaluating the IMF's gold reserves to finance debt relief.
Ms. MBOTO FOUDA: Mr. Gondwe, do you want to take that question first? And then Minister Toungui will follow.
Mr. GONDWE: Yes, as I jut said, debt sustainability has been one of the main themes that have been discussed. The question is after the completion point where do you go, and one of the things that you find is that, whereas in a number of cases, a number of bilateral countries have, in fact, forgiven debt almost completely, taking Britain as far as we're concerned, and Japan as far as we're concerned, there is a large amount of debt of the multilateral nature, the World Bank, the IMF, and so forth. And the question is what do you do with those.
Obviously, it's a problem, and our understanding is that ideas are coming forward on how to deal with that, how to completely forgive that debt as well.
On the IMF side, the idea is that probably—this is not a new idea. It's an old one, whether, in fact, some of the gold could be used in order to completely forgive debt, IMF debt in member countries. And for the World Bank, I think the idea is that probably some or almost all developing country members of the World Bank could come out with some resources that would enable the Bank to forgive the totality of its debt also. These are ideas, and these are a good thing, as you've just said, in that they are being put forward by some very powerful people in the membership of the two organizations.
As far as we are concerned from the African side, we are extremely expectant that something will come out of it because if it does, then it certainly will help us a lot in a problem that really is stunting our ability to achieve the Millennium Development Goals as well as our growth rate that we would like to achieve.
I was talking to my central bank Governor. They said what report are we going to make to our President, and both of us agreed that this was going to be in the forefront of our report that there is a possibility that debt could be forgiven and it would mean a lot to almost all of us, particularly to a small country like mine.
Mr. TOUNGUI: Thank you, Madame. I would just like to add to my colleague's comments that in 2000 the whole world was in New York for the Millennium Summit, which set the poverty reduction goals for the next 15 years. I believe that the debt issue should be tackled in that context. There is a tendency to think that Africans come with their hands held out requesting facilities because Africa cannot carry out reforms like other continents. That is not exactly true. I believe that in Africa many countries-as demonstrated in the International Monetary and Financial Committee (IMFC) and now at the Annual Meetings-are implementing major reforms. The problem is that the world is involved in a collective effort to reduce poverty globally. Because there is unanimity, both politically and economically: while sizable pockets of poverty remain around the globe, those who are able to eat their fill cannot sleep easily. This has been the subject of all these international conferences, including the one on hunger held recently in New York at the initiative of the French and Brazilian presidents. I believe therefore that this problem must be placed back in an international context.
The issue then is to see if we can measure what Africa has obtained from these recent meetings. I believe that the only achievement has been that the HIPC Initiative has been extended by two years. That is not sufficient. We have shown to the IMFC that even some of the African countries that have reached the completion point still have debt problems. What we see as a positive development-having participated in several meetings of the IMFC-is the new, innovative ideas that are circulating, put forward by influential countries. I believe that we should all consider these ideas rather than refuse to budge and say that progress cannot be made for one reason or another. In a medical situation, for example, the patient always wants to know what kind of treatments are being proposed. As far as we are concerned, we welcome all the ideas circulating on possible formulas for dealing with debt, particularly official development assistance (ODA). Because the debt problem should not be seen as a simple matter of reducing the fiscal burden; it must be seen as vital requirement for poverty reduction, itself essential to the achievement of the Millennium Development Goals (MDGs), which were adopted at the New York Conference that I attended. I also participated in the Monterrey and Johannesburg conferences, and I can say there was not a single dissenting voice. We must now collectively shoulder this responsibility and look closely at the innovative ideas that have been advanced. It is true that Mr. Snow, Mr. Taylor and Chancellor Brown put forward similar ideas during the IMFC meeting-we do not have a strong preference for any particular one of them. We believe that all these ideas can be considered together and that it is essential to settle the recurrent problems of Africa. It is vital that we all agree to further consider these points rather than refuse to budge.
Mr. GAHUNGU: Just one comment: in this kind of meeting, there are lots of speeches and promises made. For my part, I believe that we must sometimes request an agenda, a timetable, particularly for post-conflict African countries, which cannot wait indefinitely for promises to be kept.
Regarding debt, for me there is one new factor. When we discuss debt, be it multilateral or bilateral, we are only thinking of external debt. But there are post-conflict countries that also have a serious domestic debt problem, in that this debt will at some point seriously erode the government's credibility, because it runs counter to the desire of the public authorities to promote the private sector. If the government cannot settle its domestic debt, how can it credibly introduce a policy to promote the private sector?
QUESTIONER: Did the African Ministers specifically request for forgiveness of multilateral debt owed by poor African nations? Taking a cue from what Japan and Britain have already done, did they actually ask that this debt be forgiven, or did they just leave that at the mercy of the developed world?
Mr. GONDWE: I would have to say that we have not formally probably as a group asked for complete debt forgiveness. I have to say, though, that in the corridors and in a number of places from time to time we have indicated ourselves that probably for the effectiveness particularly of the debt relief exercise, for its effectiveness to be really, you really have to be looking at the totality of the forgiveness of debt. And indications and feelers have been made.
The important thing is that looking at the objectives, the objectives that have been set by the United Nations and the world of what we ought to be doing, two things: one, the MDGs we're talking about, and looking at the sort of growth rates that Africa has to attain, 6 percent, 7 percent in a sustainable way. Looking at those, I think everybody is of the view that if we don't do anything about the multilateral debt, it's not going to be easy for the African countries to attain those goals. I think that's what is important.
For us, or for me certainly, the important thing is that everybody now through some rigorous analysis by some of the first-class minds in the world, a conclusion has been reached that for us to get to those goals, this has to be done. And as both of us or the three of us have said, the important thing now for us is that after all this analysis, at the political level, at the highest political level in some of the largest countries, it has now been realized that this ought to be done. And to us, the important thing is that the ideas are coming across as to how it could be done, and we feel very confident that it will be accepted quickly as a matter of policy that this remaining debt in the multilateral from the multilateral institutions could also be forgiven.
And we're looking forward to that, very much so, and there are some problems. Problems have been put forward for after that what do we do. We're talking about already what will be done after that is done. Do we continue particularly for countries like my own, the poorest countries, whether we continue to borrow or shall we be expecting more grants? There are some problems of IDA giving us grants. These have been brought to us. And we can see the problems. But we hope very much that now that the international community has decided that this is something where they're going to go, given issues of how difficult it's going to be, the problems that are presented by substituting debt for loans will also be looked at. And we feel very expectant that this is so.
However, nobody has said this, but let me say it, that it's one thing being given this opportunity. We realize as African countries that regardless of this opportunity, if we don't seize it, if on our side we don't perform, if we don't come out with the right policies, if we don't implement the right policies, regardless of what our colleagues are doing for us, it will not work. We realize that. They have not asked us about it, but I would like you, the press, to know that we as African countries realize that we also have a part to play, that when that's been done, we realize that for us to reach the goals, then the tables are turned. The responsibility is ours. We have to perform. We have to take the right decisions. And, above all, issues of governance we'll have to tackle them head on, that the resources that become available to us will be used—or should I say shall be used to really, really make sure that they are productive.
I wanted to say that because we always think that the third party has answers for us and so forth. This is not so. They will give us the facility. They will forgive us the debt. But we realize that the ultimate responsibility for moving forward is ours. And I'd like to take this opportunity to assure members of the press and I think through you the other people who are on the other side, to realize that we do recognize that as a responsibility.
QUESTIONER: On the issue of African representation in the Fund, I was wondering if you could give us an update on any progress there.
Mr. TOUNGUI: This is not solely a political issue. I believe, like those Africans who said so in the IMFC and during the Annual Meetings, that the world is changing; it is evolving. The international institutions must also espouse these changes in the international situation. Africa, like other regions of the world, would like to see a better distribution of roles-a place reserved for them on the basis of the role they play-at the United Nations and in the Bretton Woods Institutions. Let me give a simple example: at the IMF today, most of the programs are being implemented in Africa, but what is Africa's representation on the IMF's decision-making bodies? We are told that we have Executive Directors. Agreed! But what voice do these directors have? We are told that we have an African Department. OK. Fine!. We even have an African as the director of the African Department. But how many Africans are there in the other departments? The IMF doesn't consist solely of an African Department! So we believe-and as Africans we met on this late last year or early this year in Johannesburg to address the problem. And it is an issue that we will never stop raising. It is fundamental. When the world began to profoundly change in the late 1980s and early 1990s, everywhere there was talk of democracy, good governance, and transparency. This should also be reflected in the international institutions! The decisions that are made in these institutions should reflect good governance, democracy, and transparency. We believe that the African countries have something to say in the decisions taken, most of which concern them. Today many countries require programs, but most of these programs are for Africa. I would add, as my colleague said earlier, it should not be thought that Africa itself has not been considering these issues. You have certainly heard about NEPAD. The African heads of state themselves met to consider and outline some approaches, and then establish a peer review system-and these reviews have now begun. There are already African countries that are being reviewed. If we are asked to change, everyone must accept the changes. That's what we are saying. We are not asking for something vague; what we want is for the developing countries as a whole, and Africa in particular, to be taken into account in the international institutions where decisions are taken, particularly those which concern our lives and our peoples.
MR. GAHUNDU: I believe it is legitimate for African countries also to have a voice in the institutions, particularly the IMF and the World Bank. It goes without saying that this will not be sufficient if there is not, at the same time, greater representation among the staff and senior managers. Because, as far as I know, even the Executive Board itself initiates dossiers. It is therefore important that there be good representation among the senior managers as well, on the basis of qualifications and skills, naturally. An adequate representation of the African countries, so that among those who prepare and review dossiers, there is a sufficient number of Africans. This is important too! I believe that this demand is entirely legitimate. Moreover, analysis of dossiers is not entirely impersonal. The presence of Africans at high levels, at decision-making levels, can also contribute what I would call a certain sensitivity, a more specifically African point of view, to some problems.
Mr. GONDWE: A good deal of the operations in the Fund and the Bank really are in Africa. And it's important, I think, if the Fund and Bank are going to be effective, that they do hear an African point of view. As she told you, I have been in the IMF myself, and I do realize that when you go to a member country, the view that you had, the technical view that you had in Washington can very drastically be changed when you hear another point of view in the field.
Now, what I think is being said is that for the effectiveness of these two institutions in Africa, it would be very important if we had more of our people here talking about the realities of Africa, which really only an African can capture. And that is extremely important.
The Africans realize that as things are now, the representation in the Fund depends upon how economically strong you are, and that in calculation of the national income, balance of payments and so forth, we shouldn't even be having two Executive Directors. In fact, I think we should end up with only one.
So as our representative said today, when you look at the formula, it's not all that scientific, if I may say so, because I've taken part myself in calculating it. There's a lot of judgment that is involved in deciding just how much voting power a country is going to have and, therefore, how many representation a country is going to have.
And we are saying in view of this big goal that you would like to attain to be effective in Africa, maybe you could go a step further in terms of the calculations of how representation should be arrived at. Go a step further. After all, it's not all that scientific anyway. And make some political judgment also to be put in the context. And if you did that, then you will come out with a view probably that it is possible. I think now you have something like nine or more Executive Directors in Europe—is it ten? Just in Europe, ten; two from Africa, and some people would rather have only one. Very few in Asia and so forth. Can't we have a political coming together to think again and see whether, in fact, representation can be looked at again. That's what we're asking, that politically let's look at this again in order to make our institutions more effective in countries where they ought to be effective. Why can't we do that? That is what is being asked.
And I think that on this one, it's not just one country, it's the whole of Africa. And I think that a number of developing countries are with us on this. And it made sense in the '40s to have nine or ten Executive Directors from Europe. It probably does not make sense anymore, because those days the IMF really was for Europe, particularly. Now it's for Africa, particularly. And I think that we are asking that probably you could look at it again and see whether the voice representation could be reviewed. That's what we're asking for.
QUESTIONER: Could you please tell us if the fact that the donor countries are tackling the debt problem seriously is due to your own effort or the efforts of civil society representatives - some have paid the ultimate price. And if the debt is forgiven, are you going to be able to finance the NEPAD development project?
Mr. GONDWE: That's not a difficult question to answer, probably. What we are saying, there are a number of obstacles to development. Debt is one. There are a number of other things that one has to call on in order to achieve these.
There are a number, but it depends upon us to do, as I just said, but issues like debt, issues like inflows of capital and so forth probably are not only dependent upon us, and I think our colleagues have to help us. What Mr. Kohler used to say, a tripartite responsibility to growth. There is ourselves, there is the donor community, and there is the multilaterals.
And what we are saying is that even if we were to take the responsibility, which we have, but we are going to do something about it, it's not possible for us to move because of these obstacles which we can't do anything about. So, yes, if we were to be given that, I think we have an easier job of getting at the targets.
Now, who asked for it? I've just answered. We have goals given by the international community on which the donors have signed off on that we ought to reach those goals. There is an understanding throughout that for Africa in what people call a global village. There is no question anymore that these are Africans, these are Europeans, and these are Americans. We are in the same global village. For this part of the village to grow, something has got to be done. And I think everybody looking at this global village thinks that Africa for it to take its rightful position, Africa for it to do something about its very underprivileged people, one would have to be forgiving debt, one would have to be coming up with grants, one would have to be doing that, assuming that the Africans themselves would take the responsibility, it is possible for this thing to be achieved.
So it's really a shared view of what needs to be done. It's not only the Africans, it's not only the donors, but everybody thinks that this should be done.
Mr. TOUNGUI: Thank you, Madame. I don't really understand the question because, whether we are looking at the efforts of the government or of civil society, what is important is a collective awareness of the problem. I believe that today civil society is part of the current context. In all countries where democracy has taken hold, civil society of necessity develops. The objective of most nongovernmental organizations is clearly to support the decisions of the government when they agree with those decisions, or to push governments in the direction they would like to see them go. I believe that the current understanding of international society reflects not only the actions of international or national civil society, but also of governments, including the Western governments. I said earlier that the Millennium Summit in New York was a summit of governments, of heads of state. What is important for us, therefore, is that there be a general movement toward a single objective, namely, poverty reduction throughout the world-a movement that considers the debt problem to be one of the essential issues of the poverty reduction process.
QUESTIONER: I wonder, Mr. Gondwe, and any of the others, give us a progress report on NEPAD and how NEPAD in your view might be folded into the benefits that will come from an expanded debt relief program.
Ms. MBOTO FOUDA: Let me ask Minister Gahungu to take that question. You go first, Mr. Minister, then Mr. Gondwe will complement.
MR. GAHUNGU: Yes, I believe that we must point out straightaway that NEPAD is a concern, an initiative, that was developed by Africans and is supported by them. It is clear that it is early days yet, and that specific actions have not yet materialized. But I would rather ask Mr. Gondwe to give a more detailed view. I believe that this is an initiative that should also be supported by the donors as it is one of which the Africans wish to take full ownership.
MR. GONDWE: Among a number of things, NEPAD has a certain number of principles which are stated that have to be accomplished. For the first time, you have a purely African organization that states, for example, that countries ought to pursue good governance as an aim; countries ought to establish macroeconomic stability, that's a must, they must do it; countries must do a set of things as such.
It also sets a framework within which countries can actually discuss and share best practices. If one country is doing very well, another country is not, it gives an opportunity for the other country to learn from the other. This is what is called the peer review. A number of Western countries look at that more as an objective that NEPAD must score on.
But on the other side, also, NEPAD requires that you come together in various regional organizations in order to develop, in order to form larger markets. You ought to be coming out with policies on education and so forth.
So there are a set of things that African countries by their own now, no longer forced by the IMF or the World Bank or whatever to do, on their own they ought to pursue as such.
It is also an extremely important aspect of NEPAD that there ought to be some solution of the debt problem. It's a very, very important cornerstone also of the NEPAD.
Now, what we think is that the debt burden will no longer be an obstacle, we'll be able to actually pursue the objectives of NEPAD, probably even more intensely than would have been the case if debt were to be an obstacle.
So it's extremely important that even by NEPAD standards for that to go, and, of course, within NEPAD there are projects that it particularly favors. Most of them are of a regional nature. Instead of only roads being only for one country, NEPAD will support a road that probably goes through a number of countries in order to get integration going.
But from a debt point of view, the question that you're asking is a cornerstone of NEPAD that ought to be solved for the African countries, assuming that they are pursuing other objectives that NEPAD is for, that if that goes, then it's possible for us to grow much higher as also determined by NEPAD.
So debt forgiveness is a very important aspect of NEPAD, and we happy with the statement that Secretary Snow made today, and a number of Europeans and the French have been talking about today, that the possibility is there that the multilateral debt would go.
MR. TOUNGUI: I just wanted to point out that there will be a meeting here tomorrow and Tuesday, I believe, on the NEPAD, between the G8 and the NEPAD Steering Committee. A number of the African ministers responsible for NEPAD are here in Washington and they will be holding this meeting. If you check this meeting out, you may learn more. I would just say that NEPAD is an evolving initiative. There have been several summits of heads of state on this subject and a technical committee in each region is working on it. The aim is to ensure that Africa, as my colleague Mr. Gondwe said earlier, be at the forefront of the debate about its own development. I believe that it is an idea that is on the move. Can we make an assessment? What would an assessment be at this stage involve? It would be to ask whether, in terms of infrastructure, NEPAD had already led to the construction of intra-African roads, the creation of airlines, etc. That's not what this is all about. I believe that the discussion stage has begun and progress has been made. One of the important advances, as I said earlier, has been the peer review mechanism. Under this mechanism, countries assess one another on a series of issues relating to good governance. I believe that this is already an important positive step. It concerns good governance, issues related to combating corruption, and the promotion of democracy. I can only encourage you to take an interest in this meeting to obtain more information from the African ministers of finance present.
QUESTIONER: Have you done much work or had a chance to look at what affects the way economic growth feeds down into reducing poverty across the population? Because we know from figures and analysis done by UNDP and others that you still have very big income inequalities in some countries. And we've also seen sometimes cases where quite high rates of GDP growth nevertheless haven't affected poverty reduction across the population as a whole. I mean, how do you achieve that? And what sort of progress is being made on it?
MR. TOUNGUI: I would like to refer once again to the Millennium Summit, which clearly established the relationship between growth and poverty reduction. Naturally, as I said earlier, and as my colleagues emphasized, particularly in mentioning the NEPAD, this is not a problem that can be resolved by addressing one facet, in isolation. It is a problem that affects all of Africa, speaking for our continent alone, while the problems of corruption and promotion of good governance do not affect Africa alone. They are, in my view, global problems. Clearly, it is not enough to have a high rate of growth to eradicate poverty. One condition is necessary; a minimum growth rate of 6 to 7 percent is needed if we are to hope to push back poverty on a sustainable basis. Once this rate of growth has been achieved-I believe that examples of countries have already been mentioned-other conditions must be met: here we are touching on the issue of revenue-sharing that you mentioned. It is not enough to achieve high rates of growth for poverty to magically disappear. There must also be revenue-sharing at the national level that is different from what it has been in the past. This is completely normal and is why poverty reduction must go hand in hand with the establishment of institutions that guarantee good governance and combat corruption. All of this is therefore interconnected.
You asked whether we had had an opportunity to look at the impact of growth on poverty. Yes, we did. I would even say that all international conferences, including meetings of the International Monetary Fund, look at these issues, and particularly the Development Committee. The answer is simple. Everything must be done to ensure that there are high levels of growth everywhere. That is to say, we must eliminate all the bottlenecks, the obstacles that are preventing African countries from achieving levels of growth that would enable them to reduce poverty. At the same time we must ensure that we establish modern democratic institutions, structures for combating corruption, and institutions that guarantee good governance. The two things are intimately interconnected. High rates of growth are not enough to eliminate poverty. There are still pockets of poverty in countries that have achieved high growth rates-which are rich countries-because throughout the world, in all countries, and unfortunately for us in Africa, these problems are perhaps all the greater, there is, as I was saying, the problem of the equitable distribution of national income and of the fruits of growth among all the inhabitants of each country.
MR. GONDWE: Have we done studies to relate growth to poverty reduction? The answer is very much yes. A lot of that work has been done in this institution, the IMF, and secondly, in the World Bank. In fact, one reason why people have pushed the PRSP process is the work that was done and that relates poverty reduction to growth.
However, while I was here, there were equally important pockets of, if I may say so, resistance which felt that it is possible for you to go to pursue the issues of poverty reduction at the expense of growth. You could invest in a number of sectors that probably were not going to give you to yield a lot of productivity, economic productivity, while at the same time probably taking care of the poor without really coming out with meaningful growth. There are some people who think so.
But there is, secondly, in the Bank and the Fund enough studies that have taken place on that. I think a person called Mr. Dollar in the World Bank particularly has done some extremely useful work, and here in this institution Mr. Boorman, who used to be our Director for the Policy Development and Review Department. He did some very valuable work, and the reason why, as I said, we came out with the PRSP as a process is on the basis of those studies.
The PRSP in my country has central pillars, I think about four or so. One pillar is for growth, another one is to take care of poverty issues, and so forth. And we ought to be pursuing all those at once. And I think that if one were to succeed on the growth side and one were again to succeed in pursuing the other pillars, you come out with both. And that is what the theoretical analysis shows.
Unfortunately for us in a number of African countries, the period has not coincided with the time when our growth rates have been all that high. I think that the average growth in Africa is lower than 4. The studies that have been made show that you really ought consistently to be growing at about 6 to 7 percent for you really to come out with meaningful reduction of poverty. I think on that one, Mozambique is the best example that I've heard. The Prime Minister was telling us at the Commonwealth Finance Ministers Conference that within a short time, the people below the poverty line were 70 percent, but now they've done so well that that figure has been reduced to 54 percent, which is excellent.
But then when you look at their growth, the average is more than 7 percent growth rate that they have been pursuing. So you really ought to be having a very, very high growth rate for a meaningful dent on poverty.
QUESTIONER: Is there a consensus among the African Finance Ministers on a specific approach to achieving the Millennium Development Goals? Considering debt is forgiven today, do you think there is fiscal prudence, do you think there is good governance to be able to turn this over into sustainable development?
And, secondly, on the issue of intra-African trade, that's one major problem in Africa. And what do I mean by this? Ghana produces cocoa. It goes to Switzerland and it becomes chocolate, and you cannot enforce. There's no mechanism among African countries to be able to exchange, and do trade among themselves so that it generates wealth and generates development. I don't know whether there's anything that has been discussed at this meeting, or whether there's anything at all on that discussion to address this problem.
MR. GONDWE: I think the question that you are raising is not new. I think I remember it being raised even in my young undergraduate days. That was about 40 years ago. It shows you how old I am. The question of can African trade by itself.
I think that we are coming near probably to an approach where we are having a number of regional integration. You have SADC in the South. You have the COMESA. You some blocs which are creating an environment in which it will force Africans probably also to create some trade diversion. Trade diversion is supposed to be a nasty word, but let me use it, where, in fact, instead of trading only with Europe, because of the structure of your trade tariffs, you're beginning now to get the situation in which you could be doing that.
Now, it takes time. It will take time. My country and Tanzania, for example, textile trade now is really coming up. Textiles produced in Tanzania is preferred to textiles probably produced elsewhere. It's happening. The tariffs are allowing that to happen. So that's coming up.
Now, your first question we need more, by the way. Within ECOWAS, I think you're coming out with that. It's possible that if you really implement the tenets of ECOWAS or the tenets of SADAC, it's even more pronounced. They're more organized there than we are, the Anglophone side. It's possible that we could actually come out with some trade blocs, depending upon how industrialized we become. This is going to happen.
You asked that if we had debt forgiveness, are we going to make use of it? This is what I have just been telling you, that we realize that there is a part we have to play. You're talking about macroeconomic stability, you're talking about fiscal discipline, you're talking about a number of other policy issues which Africa has to take.
I should tell you that probably I know a little bit more than you do. I think on the question of macroeconomic stability, Africa has done now a lot. There are now few pockets of countries around Africa that have not really scored on macroeconomic stability and fiscal policy. If there's anything that this institution has done to help is to help a number of African countries to attain this macroeconomic stability, and they're really coming out with World Bank structural issues that they've come out with.
I think that we are as Africans now on the path to do it ourselves. It's no longer now the IMF or the World Bank telling us what to do. We know what to do. The question now is the political will. But we're doing it. Inflation has almost more than halved the last five, eight, ten years. And interest rates are down and so forth.
So we are doing it, and what we're saying is that there are things which are beyond anything that we can do, and one of them is debt. If they could forgive us that, we are going to go ahead with other policy issues on our own. We should be able to make some mileage out of the debt sustainability of which we are talking about. We can make use of it, and I am quite certain that if they were to do this, we could go quite far to achieve what we have decided to achieve in terms of economic growth.
Yes, so I am quite certain about that myself. I was not certain two years ago. But then I was at the IMF here. Now that I am at home, I'm quite certain that we are quite determined to do something about it.
QUESTIONER: We've heard a lot of talk about the meetings about debt relief for Iraq and other non-HIPC countries such as Nigeria. Is there a risk that donors will pay attention to that and put the agenda for HIPC back on the back burner?
Mr. GONDWE: I would say that, no, the two are distinct. What I am afraid of is that putting Nigeria together with Iraq we may emphasize for sentimental reasons that are currently in the air politically, that talking about Iraq could be at the expense of Nigeria. It's quite my view. It will not be at the expense probably of the HIPC because the HIPC is a very, very established initiative now. We're talking about very well defined rules and how it's going to be done. So I don't think so. We are going beyond the so-called completion point, and you are, you know, chartering waters farther from the completion point.
So the HIPC I think is intact.
My fear, quite frankly, within the African corridors, we are very much afraid that issues not only in Nigeria, my colleague from Gabon has the same problem, I think, the middle-income countries in Africa and so forth. Probably their situation could be de-emphasized by what probably is happening in Iraq. That's my view anyway. I probably am overstating it, but that's what I think.
Lucie MBOTO FOUDA: Thank you, Minister Gondwe, thank you Minister Gahungu, thank you, Minister Toungui. We regret Minister Futa was unable to join us here. We'll see each other again next year, same place. Thank you very much.
IMF EXTERNAL RELATIONS DEPARTMENT