Thursday, April 23, 2009

Global financial crisis to hit Africa the hardest - World Bank

Global financial crisis to hit Africa the hardest - World Bank
Written by Chiwoyu Sinyangwe
Thursday, April 23, 2009 8:45:05 PM

AFRICA will be the hardest hit by the effects of the current global financial crisis with 700 thousand newly born babies expected not to reach their first birthday, a World Bank senior official said Wednesday.

And World Bank vice-president for Africa Obiageli Ezekwesili has insisted that developing countries like Zambia should maintain open-market policies despite the current global financial crisis, saying recent robust growth on the market has been driven by liberalism.

During a briefing ahead of this yearÕs World Bank/IMF Spring Meetings, World Bank chief economist for Africa region Shanta Devarajan also warned the social impact of the global financial meltdown on the continent might be exacerbated as developed countries were likely to become more averse to give more aid.

And Ezekwesili warned that Africa should not move away from market driven policies which had been behind the recent strong economic results for the continent.

Ezekwesili also said foreign aid to Africa was this year going to decrease as most donor countries continued to battle to become insular.

ÒThere is a likelyhood of serious development disaster if the countries undo market reforms due to populist pressure to move in reverse gear,Ó Ezekwesili said. ÒCountries need to continue with the market reforms because it is those reforms that have been driving growth on the continent in recent years.Ó

She also said the collapse in the economic growth on the continent might lead to political and social instability especially among volatile countries on the continent.

Ezekwesili also warned that with the collapse of the Balance of Payment (BoP) support, most African countries might face challenges financing their budgets.

ÒWe will continue to work with the Fund (International Monetary Fund) to find ways of mitigating that effect,Ó she said. Ò. . .The assistance of the Bank to Africa through the International Development Association (IDA) is by the end of this year going to increase from the targeted US $6.8 billion to over US $7 billion.Ó

The Zambian team to this yearÕs Spring meeting has been led by the finance minister Dr Situmbeko Musokotwane.

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