African leaders on Thursday strongly rejected the notion that protectionist policy responses by developed and developing countries would in any way aid the world in mitigating the impact of the global economic crisis on the continent.

This rejection was made during a debate at the 19th World Economic Forum (WEF) on Africa, in Cape Town, in which some of Africa's most influential government officials and business representatives participated.

These participants included: South Africa's Trade and Industry Minister, Dr Rob Davies; African Export-Import Bank president Jean-Louis Ekra; African Development Bank president Donald Kaberuka; and the chairperson of Kenyan-based Haco Industries, Chris Kirubi.

The debate centred on appropriate economic policy responses for Africa, amidst the context of the global economic meltdown.

The overwhelming conclusion drawn by the panelists was that the continent should favour open-market policies, particularly in promoting trade between fellow African countries.

In fact, Ekra argued that the promotion of interregional trade could offer the most fundamental buffer against the slowdown, while Kaberuka added that it was "absolutely critical" for the survival of some individual countries that trade be expanded and promoted.

In his address to Wef delegates, British Minister for Africa Lord Malloch-Brown, lamented the fact that interregional trade remained exceptionally modest, accounting for only 5% of Africa's total global trade.

He added that the industrialised economies were struggling to cope with the economic meltdown and find viable solutions to promote economic recovery, which provided an opportunity for African nations to buildup interregional trade.

Ekra argued that trade was a powerful engine for growth, but that interregional trade growth, would depend materially on countries diversifying their exports, and of the production of value-added products, and improved infrastructure.

Kirubi asserted that Africa should not rely on the World Trade Organisation to facilitate global trade with Africa, but that African countries should rather develop their own trading opportunities through regional trade agreements.

"African countries need to see each other as a common market," said Kirubi.

CAUTION FROM SA

There was certainly space for further regional trade agreements, Davies concurred.

However, Davies provided something of a dissenting opinion on protectionism, arguing that the domestic response to the global economic crisis could not be "one-size-fits-all".

He stated that the South African government believed that trade policy should not be subordinate to industrial policy and that the country could not afford to lose the industrial capacity it had gained thus far.

Accordingly, South Africa would set tariffs on a case-by-case basis, and could even raise some tariffs if the evidence justified such a move.

Davies said that while the developed world might not be using tariff policies, their bail-out packages were linked to messages about "buying local", which was ultimately protectionist.

He added that South Africa could not compete with such measures, and said that the government would seriously consider reversing some of its tariff cuts to protect the gains made by the country's industrial policy.