World crisis to cut Africa social spending: Oxfam

NAIROBI (Reuters) - African governments and their donors will be forced to cut social spending in 2009 as a result of the global financial squeeze, British charity Oxfam said on Tuesday.

Analysts say initial hopes that Africa might avoid the worst of the credit crunch were premature, and that it will be hit hard by falling demand for commodities, reduced remittances, foreign investment, tourism and tax income.

"We fear that there will be a possible reduction in social spending as the global financial crisis is likely to hit Africa hardest this year, forcing governments to cut back on protection programs," said Eve Odete, Oxfam's Pan-Africa Policy Officer.

Oxfam said donor countries are unlikely to meet their aid commitments because the current global financial crisis is unprecedented and its effects will be wide reaching.

"Kenya is already affected by this. For instance, the Global Fund has asked Kenya to start funding HIV and Tuberculosis programs from the national budget. That had never happened," said Charles Mwangi, coordinator at the Global Call to Action against Poverty (GCAP).

The Global Fund was set up to fight AIDS, tuberculosis and malaria. It has committed $14.9 billion to prevent and treat the three diseases in 140 countries worldwide.

The World Bank earlier this week revised its forecast for Africa's economic growth this year to 3.5 per cent from 6.8 per cent. Oxfam said this will reverse gains made in the fight against poverty and disease.

Developed countries have pledged development assistance of 0.7 percent of each country's income by 2010 and an extra $25 billion for Africa.

"We are calling upon developed countries not to cut aid and we should all resist any moves by the IMF and the World Bank to cut funding meant for social spending," said Odete.

On a continent plagued by poverty, disease and conflict, social spending from donor countries and governments is often the source of recovery.