UN official Says Global Financial Crisis Has Serious Iimpact on Africa

    "While Africa's banking systems have not been affected by the crisis because of prior reforms and limited integration into the global economy, the threat to its real economy is indisputable," he said.

    Janneh said growth in the continent would fall by at least 1.5 percent in 2009 from 2007 levels, and could even decline by four percentage points. Trade and financial flows would also be greatly affected as commodity prices fell and massive capital outflows recorded, according to him.

    Private capital inflows such as foreign direct investment, remittances, tourism receipts and trade credits were also drying up, he noted, adding that the crisis would erode much of the gains that Africa had made in the recent past in both economic and social sectors.

    "The solutions being put together in response to the crisis need to be carefully calibrated to take account of differences in the circumstances and needs of African countries," Janneh said.

    He emphasized that African countries need to scale up efforts to promote economic diversification and increase the mobilization of domestic resources so as to steer their economies through the crisis.

    The crisis has revealed the inherent problems of the international financial system, and better governance is essential to improve the functioning of the international monetary and financial system, he noted.

    The UN under-secretary-general urged African countries to use their existing institutions to the fullest in responding to the crisis, and disclosed that the United Nations was promoting an inclusive approach to deliberations on the crisis at the global level and would be convening an international conference on the world economic and financial crisis and its impact on development later this year.

    The ongoing AU summit, slated for Feb.1-3 in the Ethiopian capital, is held with the Infrastructure Development in Africa. The last day of the gathering mainly focused on the financial crisis and its impact on Africa.