In an interview with CNN's Robyn Curnow, the IMF boss, Christine Lagarde, confirmed her optimism about the growth of most of African economies, but added that the Leaders must focus intensively on youth unemployment, which is becoming a serious challenge to governments on the continent.
EnterpriseAfrik brings the full interview to our cherished Readers.
CNN: More than ever the Eurozone crisis has put it to African leaders that they have to look East. How significant is that?
Christine Lagarde: All countries are interconnected.
There is no question that a crisis in one particular part of the world
is going to affect those countries, but also all of the countries,
especially if there's a large volume of trade between those countries.
When I look at South Africa, I know there is about 30% of trade going
to Europe, so if something goes wrong in Europe it will have an effect
on South Africa which is why any solution will require the cooperation
of all players and I understand perfectly that South African authorities
are concerned about the way the Europeans are dealing with their crisis
and are trying to address solutions.
CNN: Many people here have watched with fascination
how Portugal has turned to Angola for some sort of financial help. Do
you see this shifting perhaps the power relations on a global scale?
CL: There is at the moment a major re-engineering
between advanced economies, emerging markets, developing countries and
clearly emerging markets are playing a role that is much bigger, much
more important in terms of leadership than they did, say, 10, 15 years
ago.
So there is a re-organization happening as we speak, which is good in
the main, because there were massive imbalances and those imbalances
are not good for the global economy, but it is difficult and it's a
transition phase that is complicated to deal with.
CNN: Do African economies have a role to play that's positive? Is there something to be learned from African economies over this?
CL: Well, first of all, the African continent in and
of itself has had a growth rate that was significantly higher than that
of Europe, than that of the United States, lower than some of the big
emerging markets such as China, India or Brazil, but in the range of 6%
lately. I think that's one reason to be optimistic about Africa.
The second reason to be optimistic about Africa is that it holds
significant commodities, raw materials that are so needed for the growth
of other countries -- if you look at the volume of trade between, say,
China and some African countries such as South Africa, or the volume of
trade amongst African countries in terms of intra-regional trade, that
is growing as well. So those are alternatives sources of growth that
differ from the traditional trade links with, say, Europe and these are
new opportunities for African countries to actually develop and
strengthen.
CNN: What are the warning signs and concerns about African economies? What are the critical issues for you?
CL: The first message that I gave to both the
Nigerian, the Niger and the South African authorities is to rebuild the
buffers that had been used during the financial crisis wherever they
could to have reserves available and be able to either use fiscal policy
or monetary policy to make sure that growth is maintained and is
sustainable.
The second message is make sure that the growth that you encourage,
by whichever ways are available to you, it's a growth that is inclusive,
that is creating jobs, because jobs are really at the heart of any
development policies at the moment in South Africa, but in other
countries as well.
CNN: Easy to say that.
CL: Yes, I know, but it's a question of identifying
for each and every country, what are the impediments to job creation?
What are the impediments to growth? And whether it's the infrastructure
projects that need to be financed, that need to be developed, that need
to be monitored, whether it's education and vocational training programs
that need to be put in place.
That is going to be different, whether you're in Nigeria, whether
you're in South Africa, whether you're in Tunisia, but in all places
there is a vibrant youth that is expecting the leadership of those
countries to actually open the economy so that they can actually express
their talent and find ways to get integrated in the job market.
Source: CNN
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