Design local solutions - world bank advises
OBIAGELI EZEKWESILI, Vice President of the World Bank for the Africa Region, says the best option for African governments during this period of global financial disorder is to design custom-made economic methods which the Bretton Woods institutions can support them to implement.
Speaking to journalists in Africa Wednesday from Washington D.C. via video-conferencing, Ms Ezekwesili said the growth and development of the African continent largely depended on home-grown economic recipes that African governments could design in the short to medium term.
If this was done, she said governments could easily access a $7 billion interest-free International Development Assistance (IDA) concessional facility for their development projects and also a $1.05 billion support earmarked for the continent's agriculture sector by the Bretton Woods institutions. Already, some 15 to 20 countries have already had increased frontloading.
According to her, the impact of the global credit crunch on Africa was getting intense and therefore it was prudent for the continent to constructively reform its policies at national levels in order not to forever remain poor.
The Vice President further said Africa was beginning to feel the crunch because initially there was an impression that since the continent's financial system was less integrated into the rest of the world's, no immediate repercussions were realisable.
She continued that foreign aid and remittances from abroadwould dwindle since some donor partners were already having problems with their financial systems whilst about 77 percent of remitters had lost their jobs in Europe and the US.
“Because a lot of donors are struggling with their finances, receipts to finance budgets have also declined.”
Twenty-five of the world's 35 fragile states are in Africa and the World Bank indicated it had had to revise downward its 2008 growth forecast of 4.9 percent for Africa to 2.4 percent this year. “This means there would be social, humanitarian and economic destabilization.”
In the case of Tanzania and Ghana which were close to attaining Millennium Development Goal number 1 of halving poverty by 2015, such expectation had to be called off as a result of the crisis.
Also, about 700,000 babies in Africa were expected to die before the age of 1 owing to the crisis.
Governments had also been tasked to heavily invest in their countries' infrastructure particularly in the energy, transport and water sectors in order to speed up business prospects.
From Business Desk