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B N W: Biafra Nigeria World News |
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African leaders end summit, IMF urges saving of excess oil revenue
AFRICAN Heads of State ended their summit in Burkina Faso yesterday with the International Monetary Fund (IMF) urging Nigeria and other oil producing countries in the continent to imbibe the culture of saving.
Essentially, IMF advised Nigeria and the other countries not to spend the excess revenue derived from the recent high cost of oil at the international market. The Fund said the culture of saving such excess is necessary to ensure fiscal and debt stability.
Addressing the leaders at the African Union Extra-ordinary summit of Heads of State and Government in Ouagadougou, capital of Burkina Faso, IMF Managing Director, Rodirogo De Rato, said that much of the rich resources of African countries had been wasted through poor policies.
His words: "Let me elaborate on these points for those countries rich in natural resources where the blessing of mineral wealth has been undermined by poor polices. A key priority for them is to avoid boom-bust cycles as oil prices rise and fall.
"This will require that much of the revenue windfall from high prices rise and fall. This will require that much of the revenue windfall from prices be saved and incorporated into a medium-term fiscal framework aimed at achieving fiscal and debt sustainability."
Rato said that the challenge before African countries is to find ways to build on the foundation of macroeconomic stability: To build a future with more growth, employment and higher living standards and less poverty and deprivation.
He said this could only be achieved through the dismantling of trade distorting subsidies and improvement of access to African markets, asserting that trade barriers among countries are too high for any meaningful trade integration.
The Managing Director disclosed that IMF is currently assessing operations in member-countries with low income, noting that where the instruments deployed in such states are inadequate, new approaches will be considered to achieve the shared objectives of growth and poverty reduction in the continent.
According to him, IMF has taken steps to assist countries facing prospective trade shocks resulting from liberalisation under the Doha Round.
Besides, he stated that work was on among the IMF, multinational and bilateral creditors to assess the state of the debt relief under the highly indebted poor countries initiative.
Rato noted that the whole objective is to ensure debt relief or avoid a further build up of the unsustainable debt in the future for the countries.
He listed three particular areas of priority for IMF in the continent. These are to make the fund's financial assistance more flexible and responsive, sharpen its role in countries that need financial help through timely and high quality advice, technical assistance and capacity building.
IMF also intend to reinforce its analysis and assistance in support of Africa's regional integration initiatives by providing important peer review mechanism, play valuable role in promoting sound macro-economic policies and good investment.
Addressing the summit on Wednesday, the international Labour Organisation (ILO) Director General, Mr. Juan Somavia, described unemployment as the world's biggest security risk.
He said that the under-employed or working poor and unaccounted workers in the informal economy were probably the biggest security risk the world faces today.
"These problems would not be solved purely by national action, piecemeal, fragmented, parallel, conflicting advice or conditionalities received from international agencies. We need a global approach. No institution has all the answers, but we all have the mandates that oblige us to find solutions," he added.
The ILO chief expressed the belief that making employment and enterprise creation the central development objective on which all major policies should converge, especially sound macro-economic and social policies and enabling environment for investment was fundamental to the actualisation of poverty alleviation.
He noted that the time had come for Africa to be treated differently and specifically by the international communities to respect its priorities.
He explained that the continent did not need a listening service partner, rather "expect support for home-grown initiatives, must prevent child labour, fight the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (HIV/AIDS) and care for those living with it."
Also, the Vice President of the World Bank, African Region, Mr. Callisto Madavo, said that Nigerian enterprises stood the chance of benefiting enormously from its improved energy and electrical power if it reduced the energy cost to 16 per cent.
"In Nigeria, potentially an engine of growth, 97 per cent of firms surveyed, said infrastructure problems were among the top three constraints to doing business," Madavo said.
He added that the continent needed clear strategies to address specific constraints that kept people in poverty, noting: "We need to look beyond the 15-20 per cent of the labour for higher income for self-employed people including farmers.
"We must target not only the 35 million Africans who are unemployed but the 140 million whose jobs earn less than one dollar a day," he stressed.
At the summit, AU announced the establishment of Nelson Mandela Foundation for knowledge building and advancement of science and technology in the continent.
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