- Title: SENEGAL: African growth seen halved by crisis
- Date: 14th May 2009
- Summary: DAKAR, SENEGAL (MAY 12, 2009) (REUTERS) VARIOUS OF FLAGS IN FRONT OF CONFERENCE CENTRE EXTERIOR OF CONFERENCE CENTRE AFRICAN DEVELOPMENT BANK (AfDB) CONFERENCE SIGN VARIOUS OF DELEGATES INSIDE THE CONFERENCE CENTRE DURING AfDB PLENARY MEETING BURKINA FASO PRESIDENT, BLAISE COMPAORE, SEATED AT PODIUM AFRICAN DEVELOPMENT BANK PRESIDENT, DR. DONALD KABERUKA, ADDRESSING PLENARY MEETING SENEGAL'S PRESIDENT ABDOULAYE WADE SEATED AT PODIUM (SOUNDBITE) (English) DONALD KABERUKA, PRESIDENT, AFRICAN DEVELOPMENT BANK PRESIDENT (AfDB), SAYING: "It is critical that we keep trade moving at this time. You know Africa is hit through the channel of exports mainly and therefore keeping exports moving is extremely important for us and we will be putting 1.5 billion dollars of our money and work with others to ensure that we leverage the expertise and resources of other institutions." REGIONAL HEAD OF RESEARCH FOR AFRICA AT STANDARD CHARTERED, RAZIA KHAN, AND OTHER DELEGATES LISTENING TO SPEECHES MORE OF DELEGATES (SOUNDBITE) (English) RAZIA KHAN, REGIONAL HEAD OF RESEARCH FOR AFRICA, STANDARD CHARTERED, SAYING "From the peak of cross-border lending which must have been around the middle of last year to the end of the year, we saw the biggest contraction in sub-Saharan Africa. That is Africa has been worst hit by the withdrawal of that global liquidity. This of course is a concern, and anything that the African Development Bank can do in terms of coming up with new financing initiatives to try to boost lending into the region is very much needed. That's needed to sustain growth. The risk is that we are going to see private sources of capital drying up to such an extent that the impact of growth is going to be severe." VARIOUS OF DELEGATES LISTENING TO SPEECHES (SOUNDBITE) (English) DONALD KABERUKA, PRESIDENT, AFRICAN DEVELOPMENT BANK PRESIDENT (AfDB), SAYING "There may be an issue of sequencing for example in issues like opening the capital account but I think the momentum of economic reforms built up since a decade will be maintained." VARIOUS OF DELEGATES AT AfDB PLENARY MEETING ZIMBABWE FINANCE MINISTER, TENDAI BITI, LISTENING TO SPEECHES MORE OF DELEGATES AT PLENARY MEETING (SOUNDBITE) (English) TENDAI BITI, ZIMBABWE FINANCE MINISTER, SAYING: "We require trade finance, or lines of credit as we call them, in the sum of one billion US dollars. We've had some successes in getting a few million dollars in Zimbabwe and to me that is very important because that has stimulated and oiled our private sector and you can see some economic movement in the economy, there has been an increase in productivity." VARIOUS OF DELEGATE SPEAKING AT SEMINAR ON FINANCIAL CRISIS, REGIONAL INTEGRATION AND TRADE AFRICAN DEVELOPMENT BANK SIGN FLAGS IN FRONT OF CONFERENCE BUILDING
- Embargoed: 30th May 2009 01:14
- Keywords:
- Location: Senegal
- Country: Senegal
- Topics: Economic News
- Reuters ID: LVA10MWN52INQ7AUG8Z125DB57C0
- Aspect Ratio: 4:3
- Story Text: Africa's economic growth will fall to 2.8 percent this year, less than half the rate forecast before the onset of the global slowdown, the African Development Bank (AfDB) and the Organisation for Economic Cooperation and Development forecast in their annual report released at the ongoing AfDB annual meeting in Dakar.
Budget deficits across the region will balloon as falling commodity prices and demand from Western countries take their toll.
The report said also forecast a budget deficit of 5.5 percent of output, which compares with a surplus of 3.4 percent seen in the previous annual study.
Growth for 2009 was forecast at 5.7 percent before the financial crisis.
Several African countries have sought aid packages from international lenders as governments grapple with falling export income and lower remittances from Africans working abroad.
"It is critical that we keep trade moving at this time. You know Africa is hit through the channel of exports mainly and therefore keeping exports moving is extremely important for us and we will be putting 1.5 billion dollars of our money and work with others to ensure that we leverage the expertise and resources of other institutions," AfdB's president, Donald Kaberuka, told journalists before the plenary session at the bank's annual meeting, held this year in the Senegalese capital.
AfDB economists and other Africa analysts agree that the continent has been hit the hardest by the global credit drought.
"From the peak of cross-border lending which must have been around the middle of last year to the end of the year, we saw the biggest contraction in sub-Saharan Africa. That is Africa has been worst hit by the withdrawal of that global liquidity. This of course is a concern, and anything that the African Development Bank can do in terms of coming up with new financing initiatives to try to boost lending into the region is very much needed.
That's needed to sustain growth. The risk is that we are going to see private sources of capital drying up to such an extent that the impact of growth is going to be severe," said the regional head of research for Africa at Standard Chartered, Razia Khan.
Kaberuka called on African governments to resist the temptation to resort to protectionist measures as they attempt to support ailing economies.
He said the financial crisis shouldn't have a negative effect on reforms already in place.
"There may be an issue of sequencing for example in issues like opening the capital account but I think the momentum of economic reforms built up since a decade will be maintained," Kaberuka added.
The bank would help Africa cope with the effects of the downturn by opening a one billion US dollars trade finance facility, offering 1.5 billion dollars in non-concessional financing, and speeding up the disbursement of previously agreed loans, he said.
At a meeting on Monday (May 13) AfDB announced the Group will facilitate the entire 300 million euros loan for Kenya's Lake Turkana Wind Power Project, out of which, the institution intends to provide 100 million euros.
Zimbabwe's Finance Minister, Tendai Biti, also hopes the bank will increase its help to his country's devastated economy.
"We require trade finance, or lines of credit as we call them, in the sum of one billion USD. We've had some successes in getting a few million dollars in Zimbabwe and to me that is very important because that has stimulated and oiled our private sector and you can see some economic movement in the economy, there has been an increase in productivity," Biti told Reuters.
Biti said his country will see a 6 percent growth rate from 2009, above Africa projections.
After a difficult 2009 growth would partially recover to 4.5 percent in 2010, the report forecast.
Last month the International Monetary Fund said growth in Africa would slow sharply this year, projecting a rate of 2 percent, down from 5.2 percent in 2008. - Copyright Holder: REUTERS
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