ADB's Poverty Reduction Initiative

OUAGADOUGOU- Burkina Faso (PANA) -- The African Development Bank (ADB) is stepping up financial and technical assistance designed to reduce poverty in member countries through the strengthening of their production capacity and promotion of policy reforms, the bank's president, Omar Kabbaj, has said.
"It is highly worrisome that Africa is approaching the third millennium with up to 45 percent of the population living in absolute poverty and seriously lagging behind those in other developing countries," he told the 34th OAU summit.
Kabbaj said Africa needed to achieve a sustained level of economic growth of 8 percent to 10 percent per annum to "arrest and reverse the spread of poverty.
" The continent recorded GDP growth estimated to have averaged 4.
5 percent in the past two years.
This growth, which is an improvement on the less than 2 percent average during 1990-95, surpassed that of population with close to 40 of the 53 African countries experiencing positive growth in per capita income.
Kabbaj said the overall economic performance "remains vulnerable to adverse external shocks emanating from weaker international prices for some major primary commodities, unfavourable weather conditions and civil strife in some countries.
" To tackle these problems, he recommends "an integrated, multi-disciplinary approach, which ensures that the promotion of private sector, empowerment of the civil society, better management of the environment, local institutional capacity development and good governance, are paid even greater attention.
" One key instrument put in place by the ADB through its African Development Fund (ADF) to fight poverty, Kabbaj said, is the microfinance for the poor.
He said this "ADF micro-finance initiative for Africa," was aimed at increasing access to credit and financail services for micro-entrepreneurs, especially women.
Some 20 million U.
dollars of concessional resources has already been earmarked to support the initiative, which is expected to use non governmental organisations and other grassroots organisations as intermediaries.
On the external debt of African countries estimated at 315 billion dollars, with debt servicing accounting for some 25 percent of their export earnings, Kabbaj said the burden can be reduced through the heavily indebted poor countries initiative, which is expected to cover some 33 countries.
Under an agreement signed 28 May in Abidjan, Cote d'Ivoire, Uganda became the first African country to benefit from the initiative with a debt relief package of 30 million dollars.
The ADB group has allocated 320 million dollars in support of the initiative.
According to Kabbaj, the bank was working actively with the Bretton Woods institutions and donors to mobilise resources to reduce Africa's external debt to sustainable levels.

09 june 1998 20:40:00

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