Conference: Accra – Ghana, 21-23 May

Financial markets, adverse shocks and policy responses in fragile countries

The ERD-project is financially supported by the European Commission and five Member States: Finland, Luxembourg, Spain, Sweden and the United Kingdom

The expression “country in a situation of fragility” groups together countries with very dissimilar conditions and, therefore, different responses to shocks. Situations of fragility have been classified according to their forms and manifestations or according to their position along a pathway from crisis to recovery. Call (2008), for instance, distinguishes between weak, divided, post-war, semi-authoritarian, and collapsed states, while USAID (2005) proposes a differentiation across four temporal scenarios: deterioration, post-conflict transition, arrested development, and early recovery. Despite divergences in definitions and despite the existence of country-specific elements, the concept of “state fragility” refers to countries with dysfunctional, not fully legitimate or seriously incapacitated state institutions.

In these countries, where financial systems are not fully integrated, the impact of current economic and financial crisis was expected to be limited, even though it is recognized that weak institutions can translate into high vulnerability and low resilience of markets, household and public finances to external shocks. Moreover, in countries with unstable “social contracts”, any factor undermining the capacity of the state to meet citizens’ expectations may trigger downward spirals of social disorders and conflicts. Finally, indirect effects of the global economic crisis, such as declines in aid flows and remittances, might be substantial.

The Conference “Financial markets, adverse shocks and coping strategies in fragile countries” brings together prominent researchers from academic, international and regional institutions and policy and decision-makers from donor countries in the discussion and analysis of transmission channels of external shocks, coping strategies and smoothing mechanisms in countries in situation of fragility. Among the others, Franklin Allen (University of Pennsylvania – Wharton Financial Institutions Centre), Philippe Martin (Université Paris 1 Panthéon-Sorbonne and Paris School of Economics), Ernest Aryeetey (Institute of Statistical, Social and Economic Research – ISSER, Ghana), Joachim von Braun (International Food Policy Research Institute), Yaw Nyarko (New York University), Luca Alinovi (Food and Agriculture Organization of the United Nations), Janvier Nkurunziza (United Nations Conference on Trade and Development) will present their works and critical views.

More precisely the debate will focus on two main topics:

  1. Functioning of the financial markets in African countries in situations of fragility and the role of different mechanisms of financial and capital accumulation (capital, FDI and aid flows from DAC and non-DAC countries, remittances and trade revenues).
  2. Impact and resilience of African countries to external shocks with a particular attention to food price shock and the current global economic and financial crisis.

This discussion will lay the foundation for the assessment of specific challenges posed by adverse shocks and the global credit crunch to countries in situation of fragility with the aim of providing targeted policy prescriptions for the European Union.

Programme

Day 1 – The transmission channels of financial crisis in fragile African countries

11:00 – 12:30 Registration of participants

12:30 -13:30 buffet lunch

13:3014:00 Opening remarks

Introduction

Giorgia Giovannetti (European University Institute and University of Florence)
Presentation

Welcome address by the European Commission
Guy Samzun (Acting Head of Delegation, Head of Cooperation – Delegation of the European Commission in Ghana and Togo)

Welcome address by hosting Institution
Ernest Aryeetey (Institute of Statistical, Social and Economic Research)

14:00 – 14:15

Nicolas Gérard (DG Development – European Commission)
The EU policy approach to fragility
Presentation

14:15 – 16:15 Chair: Stefano Bartolini (European University Institute)

Giorgia Giovannetti (European University Institute and University of Florence) and Margherita Velucchi (University of Florence)
“The consequences of the crisis: a focus on African financial markets”
Presentation

Ernest Aryeetey* (ISSER)
“The Global Credit Crunch – Implications for Africa”
Presentation

Franklin Allen* (University of Pennsylvania), Elena Carletti (European University Institute), Robert Cull (World Bank), Jun Qian (Boston College) and Lemma Senbet (University of Maryland)
“The African Financial Development Gap”
Presentation

Discussants: Daniel Bruce Sarpong (University of Ghana), Chukwuemeka Okoye (University of Nigeria), Patrick O. Alila (Institute of Development Studies, Nairobi)

16:15 – 16:45 – coffee break

16:45 – 18:45 Chair: Eugene Owusu (UNDP)

Nicolas Berman (European University Institute) and Philippe Martin* (Sciences-Po and CEPR)
“The vulnerability of Sub-Saharan Africa to the financial crisis: the case of trade”
Presentation

Simone Bertoli* (European University Institute) and Marco Sanfilippo (University of Florence)
“The impact of the crisis on aid from DAC and non DAC countries”
Presentation

Discussants: Manenga Ndulo (University of Zambia), Peter Wolff (DIE)

20:30 Dinner

Day 2 – Impact of the financial crisis on fragile countries

9:15 – 10:00 Chair: Shailaja Fennell (University of Cambridge)

Giovanni Ferri (University of Bari)
“Banking system and reactions to the crisis”

Discussant: Johnson Asiama (Bank of Ghana)
Presentation

10:00 – 10:15 coffee break

10:15 – 11:45 Chair: Giorgia Giovannetti

Victor Murinde (University of Birmingham)
“Global financial crisis: implications for growth and development of Africa’s financial system”
Presentation

Janvier Nkurunziza (UNCTAD)
“Why is Burundi’s financial sector not development-oriented?”
Presentation

Discussants: Gianni Vaggi (University of Pavia), Onyukwu Onyukwu (University of Nigeria)

11:45 -13:30 Roundtable on “Fragile countries facing the current financial crisis”

Coordinated by Franklin Allen (Univ. of Pennsylvania)

Participants: Giorgio Barba Navaretti  (Luca D’Agliano, Univ. of Milan), Victor Davies (African Development Bank), Ishac Diwan (World Bank), Ita Mannathoko (IMF Bostwana), Mothae Maruping (EEC), Joe Masawe (Bank of Tanzania)

13:30 – 14:30 – lunch

14:30 -16:00 Chair: Yaw Nyarko (New York University)
Presentation

Policy Responses to financial crisis

Sanjeev Gupta (IMF)
“Fiscal Policy Responses in African Countries to the Global Financial Crisis”
Presentation

Abena Oduro (University of Ghana)
“Adverse Shocks and Social Protection in Africa: What Role for Informal and Formal Financial Institutions”
Presentation

Wendy Harcourt (Society for International Development)
“Gender and Fragility: policy responses”
Presentation

Discussants: Rainer Wichern (ECFIN), William Baah-Boateng (University of Ghana), Yaw Asante (University of Ghana)

16:0016:30 coffee break

16:30-18:00 Chair: Ajay Sharma (DFID)

China’s involvement in fragile countries

Dorothy McCormick (Institute for Development Studies, Nairobi)
“African perceptions of Afro-Chinese relations”
Presentation

Giorgia Giovannetti* and Marco Sanfilippo (University of Florence)
“China’s involvement in Africa: empirical evidence”
Presentation

Discussants: Samuel Asuming-Brempong (University of Ghana), Robert Darko Osei (University of Ghana)

18:0019:00

Press Conference organized by European Commission

Poster session – New Faces for African Development

The ERD core team has launched a call addressed to young African researchers who are working on themes related to the ERD 2009.  More than 150 applications have been submitted from 24 different African countries, and 15 participants to the poster session have been selected:

Eme Akpan (University of Ibadan)
“Oil resource management and food insecurity in Nigeria”

Muslihah Badmus (National Horticultural Research Institute, Nigeria)
“Global Food Crisis and Output Supply Response: Implication for Food Security in Nigeria”

Japhet Biegon (Centre for Human Rights, Faculty of Law, Pretoria)
“Electoral violence and fragility in Africa: drawing lessons from Kenya’s experience in the 2007/2008 post-election violence”

Christian Brice Kamga Kam (University of Yaounde II)
“L’intégration financière en zone franc africaine: une réponse à la crise financière internationale”

Dorine Kanmi Fenou (University of Ouagadougou)
“Discrimination en genre sur le marché du travail et pauvreyé monétaire au Cameroun”

Nicholas Kilimani (Economic Policy Research Centre, Kampala)
“Mitigating the Effects of the Credit Crunch: Diversifying Uganda’s Exports Market”

Albert Makochekanwa (University of Pretoria)
“State Fragility: Zimbabwe’s horrific journey in the new millenium”

Douzounet Mallaye (University of Yaounde II)
“Aide, Gouernance et croissance dans les pays africains de post conflit”

Jesse McConnell (Reform Development Consulting)
“Institution [Un]Building: decentralising governance and the case of Rwanda”

Ndubuisi Nwokolo (University of Birmingham)
“From grievance to greed: An analysis of violent conflicts in oil bearing communities in Nigeria”

Magidu Nyende (Economic Policy Research Centre, Kampala)
“Causes and consequences of fragility in African countries: Experience from the Great lakes Region”

Isaac Oluwatayo (University of Ado-Ekiti)
“Gender Considerations in Decision-making in Rural Nigeria: Implications on Households’ Food Security in Ekiti State, Nigeria”

Thomas Poirier (University of Burgundy)
“Does fragility of States affect realization of Education for all? An empirical essay”

Afees Salisu (University of Ibadan)
“Aid, Macroeconomic Policy Environment and Growth: Evidence from Su-Saharan Africa”

Sigismond Wilson (Michigan State University)
Diamonds in Sierra Leone, A Resource Curse?

20:00 – Dinner

Day 3 – Beyond the crisis

9:00 – 10:30 Chair: Giorgio Barba Navaretti (Luca D’Agliano, Univ. of Milan)
Presentation

Luca Alinovi* (FAO), Erdgin Mane (FAO) and Donato Romano (University of Florence)
“Measuring Household Resilience to Food Insecurity: Application to Palestinian Households”
Presentation

William Amponsah (Georgia Southern University)
“Beyond the Financial Crisis: Africa’s Trade and Financial Policy Challenges Under Market Integration”

Discussants: Blessings Chinsinga (University of Malawi), John Oucho (African Population and Environment Institute)
Blessings Chinsinga – Presentation

10:30 – 11:00 – coffee break

11:00 -13:30 Chair: Ernest Aryeetey (ISSER)

Antonio Ciccone (Pompeu Fabra University)
“International commodity prices, OECD import demand, and civil war in Sub-Saharan Africa”
Presentation

Yaw Nyarko (New York University)
“EU policies and African human capital development”

Ramon Marimon (European University Institute and Pompeu Fabra University)
“Rethinking Development Aid Governance in Times of Crisis (A reflection on the Accra Agenda for Action on aid effectiveness)”
Presentation

Discussants: Andrew Sherriff (ECDPM), Adepoju Aderanti (Human Resources Development Center), Rody Manuelli (Washington University)
Rody Manuelli – Presentation

13:30 lunch