WB gives assurance to African economies

World Bank Vice-President for Africa, Obiageli Katryn Ezekwesili, Wednesday, assured African countries that the bank will try its best to safeguard African economies from being directly hit by the current Global financial crisis. Obiageli who was addressing journalists from different African countries via a video teleconferencing facility ahead of the upcoming World Bank/International Monetary Fund (IMF) Spring Meeting, said that much as the crisis has not hit Africa directly, there is evidence that African economies have been dealt a heavy blow by the crunch. “We have noticed that capital flows to Africa have been largely affected in terms of the volume of remittances and direct foreign investments if you compare the figures in 2007 and 2008,” said Obiageli. She added that Africa received US $50bn in remittances in 2007 but the volume reduced by 30m in 2008 and the decline is largely attributed to the Global financial crisis. “This is because most of these people who send money back to Africa live in countries mostly hit by the credit crunch, cannot send back money anymore,” observed Obiageli. “We have also noticed that there is a decline in the amount of foreign aid Africa has been receiving, this is because most of these countries which have been giving Africa aid are facing their own financial woes,” added the WB Vice-President for Africa. She noted that as a result, African countries are experiencing falling commodity prices, lack of market and balance of payment challenges have set in, prompting the WB to come up with reforms safety net programmes aimed at boosting African economies. “Growth is key…what we want is to see African economies continue growing even during this financial crisis,” said Obiageli. Among other things, she said that the bank has earmarked over US $1.05bn to support agriculture programmes in Africa, since over 96 percent of the continent’s populations is dependent on Agriculture. The WB has also embarked on safety nets and other social protection programmes in health and education worth about $12 billion over the next two years in order to protect the most vulnerable people from the worst effects of the global economic crisis. As part of this step-up in support, the Bank is increasing its fast track facility for the food price crisis to US$2 billion from US$1.2 billion to further help countries with the on-going food crisis. Obiageli emphasized the need for African countries to sustain national investments in health, education, and other priority social programmes during the economic crisis while expanding services such as maternal/infant health and nutrition, and school feeding programmes. Also regarded as priority areas include; investments in active labour markets, income support for unemployed people, job creation and training programs. Infrastructure development is also seen as one of the key areas where developing countries should focus. The Spring Meetings are held between IMF and WB Boards which constitute the institutional heads and Economic Planning Ministers from all member states. Rwanda’s Finance Minister James Musoni is already in Washington DC for the meetings. Ends

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WB gives assurance to African economies