Business
Intra Africa trade can help Africa reduce impact of Europe’s downturn
Ezekwesili forecast a downturn of at least some 30 percent in some African countries, which she did not specify, by virtue of trade links with their key European trading partners.
She said some of the countries in Africa sent 60 percent of their exports to a particular country in Europe, and were likely to face a downturn in earnings due to the crisis.
Ezekwesili said public expenditure efficiencies were key, and urged diversification of economies and higher farm output.
Europe’s sovereign debt crisis has killed off the economic revival that followed the 2008/2009 global financial crunch, and many euro zone economies likely began shrinking in late 2011 and may enter recession this year.
The International Monetary Fund (IMF) is pessimistic, forecasting a 0.5 percent contraction in 2012 that it says could drag the world into recession.
Ezekwesili said African economies also have to strike a balance between pursuing growth, and keeping a lid on inflation.
She said African countries did well during the last financial crisis because policy-makers maintained macro-economic reforms, but they need to be even more vigilant now. Inflation is in double digits in key economies such as Nigeria and Kenya.
“We still see rising inflationary trends in some of the key countries which will need to be managed,” she said.
