Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala has said the growth outlook for the Nigerian economy and that other sub-Saharan African countries, remained optimistic.

Okonjo-Iweala stated this at the 24th meeting of the International Monetary and Financial Committee(IMFC) at the on-going IMF/World Bank Annual meetings in Washington DC. She spoke on behalf of Angola, Botswana, Burundi, Eritrea, Ethiopia, The Gambia, Kenya,
Lesotho, Liberia, Malawi, Mozambique, Namibia, Nigeria, Sierra Leone, South Africa,
Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

Okonjo-Iweala noted that “the resilience and rapid recovery of the majority of low-income countries (LICs) from the global crisis reflect their strong structural reforms efforts, pre-crisis macroeconomic policy buffers built during the good days, and increased ownership of policies, and flexibility in the Fund’s financing and engagement with the authorities.” These reform efforts, according to her, were instrumental to attracting investment inflows into the region.

Nevertheless, the immediate past managing director of The World Bank cautioned that, continuing these trends would depend on robust growth and recovery in advanced economies. “The rising global demand for commodities is arguably a key driver of the enhanced GDP growth together with increases in the prices for oil, minerals, grain, and other raw materials. On the other hand, rising global food prices have put upward pressure on inflationary trends and exacerbated food insecurity for many countries in the region, particularly net food importing countries. An acute drought, the worst in six decades, has hit hard the greater Eastern Africa region and has exacerbated chronic food scarcity throughout the region,” she explained.

Okonjo-Iweala also said, for some emerging market and developing economies, there was a need to accelerate the unwinding of accommodative macroeconomic policies with a view to avoiding overheating in the face of strong economic activity, while ensuring that the poor are protected from the effects of higher food and fuel prices. She added that progress also needed to be made in reducing risks to global growth from “still-large global imbalances” by increasing the contribution of net exports to growth in economies with large current account deficits and, conversely, by increasing the role of domestic-demand-driven growth in economies with large current account surpluses. This, she noted, would require continued policy cooperation among countries.

Okonjo-Iweala said even as growth has remained robust, some vulnerability existed. “Many LICs remain vulnerable to the resurgence of the global fuel and food price increases which is slowing down rebuilding of fiscal buffers as a result of pressures to protect social spending. LICs also face inadequate financing of priority development projects in the face of possible decline in aid flows as well as slow recovery in exports with the persistent slow recovery in advanced economies.”

She added: “Against this backdrop, we urge the Fund to further strengthen its engagement with LICs through enhanced financing using its various lending facilities, policy advice and technical assistance. More specifically, we call on the Fund to increase the concessionality of Fund lending to LICs and extend the interest free moratorium on Fund concessional resources beyond 2011. It might also be necessary for the Fund to provide more counter-cyclical support to LICs.”