15 April 2009

African and Caribbean Finance Ministers Meet Over Meltdown

Washington, DC — The impact of the global economic meltdown on Africa, preventing fresh debt problems and the response of global financial institutions, will dominate talks at a meeting expected to feature the Nigerian Minister of Finance, Dr. Mansur Muhtar, and his counterparts from other African and Caribbean countries next week

The meeting tagged "The Commonwealth Ministerial Debt Sustainability Forum" is organised by the Commonwealth Secretariat and the Organisation Internationale de la Francophonie (OIF) and will take place at the World Bank headquarters in Washington D.C. on April 22, a couple of days before the Bank/International Monetary Fund (IMF) Spring Meetings.

The gathering will afford finance ministers from some 53 countries representing 1.9 billion of the world's population the opportunity to compare notes on how to deal with the global financial turbulence wrecking havoc in developing countries.

Conveners are specifically concerned with the possible resurgence of excessive and unmanageable debt in the face of deteriorating financial conditions worldwide.

Some African countries, including Nigeria had in the past couple of years successfully paid off and managed their debt profile.

Nigeria's external debt as at February 2009 was $3.5 billion, down from $38 billion before 2006 while the domestic debt was N2.3 trillion, according to the Debt Management Office (DMO).

Both domestic and external debt profile constitute 11 per cent of the country's Gross Domestic Product (GDP), a figure the Director General of Debt Management Office, Abraham Nwankwo, was quoted as saying is under control.

However, the financial crisis is placing immense pressure on nations struggling to meet up with demands.

This has prompted concerns about fresh borrowings in developing countries particularly because it is not certain when the situation will change.

"Debt has for a long time been an issue for most of these countries. We might have thought that this was yesterday's news but now with the economic troubles, there is fear that progress the countries had made in securing debt relief and managing their debt may be lost due to a decline in trade, remittances, investment and aid," stated the head of International Finance and Capital Markets at the Commonwealth, Mr Jonathan Ockenden.

According to Samantha Attridge, an adviser on Global Issues at the Commonwealth, "With governance revenue falling and pressures to increase spending, countries may be under more pressure to borrow to help offset the impact of the crisis and meet the reasonable expectations of their people. as financing conditions deteriorate there is a real risk that countries could get into debt problems."

The ministers will share practical experiences in dealing with the current crisis, debt management and the response of the World Bank and IMF. They will have the opportunity to question the adequacy of the response of the two institutions as well as discuss and propose ways of collaboration.

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