Eurozone crisis may affect Africa, warns Kaberuka

AfDB President, Donald Kaberuka, yesterday, cautioned African governments to prepare themselves for any eventuality as the Eurozone crisis deepens and takes time to resolve.He was opening the 47th Bank’s Annual General Assembly in Arusha, Tanzania.“Across Africa, save for a few outliers, there is such a feel good factor. Nonetheless, today, I want to draw a note of caution,” Kaberuka advised.He warned that the longest recession in Eurozone had weakened banks and led to high unemployment levels.“In short, the clouds are getting darker and heavier, we must therefore be prepared,” he said.According to Kaberuka, at the peak of world economic meltdown in 2008, Africa was in a position to withstand the shocks but warned that the continent is not as robust at this time.“This time round, the resilience is not as robust, the shock absorbers, the fiscal space is weaker. In some countries, the double digit inflation is back.”However, despite the uncertainties, Africa still demonstrates the potential to grow and be part of the solution for today’s global problems.Sub Saharan African economies last year recorded a strong growth of performance of 5.9 percent that is projected to jump to 6 percent this year.Despite the growth, this is still low and insufficient to bring down poverty fast enough given the increased population and narrow set of growth drivers. It is said that much of African growth stems from a range of traditional commodities exports.“Are we to tell the world, African investment opportunities are the low hanging fruits, part of the solution to today’s problems?” Kaberuka pondered.He reminded African governments to focus on structural reforms, debt management, fiscal policy, which are the lessons learnt in the 80s and early 90’s.To maintain Africa’s momentum, other areas cited include building of capacity to absorb external shocks, job creation, managing natural resources, investing in skills at all levels of a modern economy, energy, connectivity and food security.Tanzanian President, Mrisho Jakaya Kikwete, emphasised the need for regional cooperation and intra-trade among African countries. Intra-trade within the East African Community grew by 86 percent between 2006 and 2011.“We should increase trade amongst African countries. At times, we worry about international markets yet there is an opportunity at the next border,” he emphasised. Kikwete urged African countries to explore the emerging economies as alternative markets.Rwanda’s Finance Minister, John Rwangombwa, acknowledged the partnerships with regional member countries to play a key role in the continued growth.“Regional member countries must come up with viable and good regional programmes to attract additional resources from the regional window,” he said.The five day AfDB annual meeting brought together over 2,000 participants across Africa and development partners.

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Eurozone crisis may affect Africa, warns Kaberuka