Hiking energy prices are seen as a plague and danger to the economy in most African countries, in particular non-oil producers. However, a new study shows that the record surpluses by oil producers are "recycled" by banks, often invested in African non-oil economies. A new study sponsored by the International Monetary Fund (IMF) looks at where the large funds earned by oil exporters due to soaring prices are flowing. As in earlier eras of high oil prices, petrodollars are "recycled" by international banks where they are placed, and invested as loans into emerging market economies, IMF researcher Johannes Wiegand has shown. Around half of this new risk capital is pumped into emerging Eastern Europe, with Asia coming second (though at a reduced rate) and Africa coming third. Investments in Africa are quickly growing.

CARE turns down federal funds for food aid

CARE, one of the world’s biggest charities, is walking away from some $45 million a year in federal financing, saying American food aid is not only plagued with inefficiencies, but also may hurt some of the very poor people it aims to help. CARE’s decision is focused on the practice of selling tons of often heavily subsidized American farm products in African countries that in some cases, it says, compete with the crops of struggling local farmers. The charity says it will phase out its use of the practice by 2009. But it has already deeply divided the world of food aid and has spurred growing criticism of the practice as Congress considers a new farm bill. “If someone wants to help you, they shouldn’t do it by destroying the very thing that they’re trying to promote,” said George Odo, a CARE official who grew disillusioned with the practice while supervising the sale of American wheat and vegetable oil in Nairobi, Kenya’s capital.

World trade talks reach crunch point

The meeting of trade ministers which begins in Geneva on Monday presents the last realistic opportunity for member countries of the World Trade Organisation (WTO) to salvage something out of the Doha Round of trade talks and register at least a modest success. But what are the key is But what are the key issues at this stage and what could the outcome mean for Africa? When the Doha Round began, there was a general understanding that progress depended on whether members strike agreements in four major negotiating areas: agricultural trade between nations, access to one another's markets for non-agricultural goods; the right of citizens of member countries to sell their services in one another's countries; and development issues which have a particular impact on the world's poorest countries, otherwise called poor country concerns.