IMF says Africa needs $2.5 bln bailout from economic meltdown

LAGOS, June 9 (Xinhua) --The International Monetary Fund (IMF) has predicted that the next year may witness dramatic increase in credit borrowings by African countries to the tune of 2.5 billion U.S. dollars as a result of biting effects of global economic meltdown, the Lagos based This Day newspaper reported Tuesday.

The IMF Country Chief and Resident Representative to Nigeria, David Nellor, made the disclosure while on a courtesy visit to the Minister of Labor and Productivity, Adetokunbo Kayode, in Abuja on Monday.

He singled out Nigeria as one country that has so far escaped from the immediate impact of the world financial crisis due to the accrued benefits from the fiscal reforms.

Nellor particularly pointed to the oil savings from excess crude oil account as well as the banking reforms as major contributory factors in the measure of financial stability being enjoyed by Nigeria.

"The crisis is clearly a big issue globally and each country has its own challenges and for several countries in Africa, they need finance," he said.

"If they don't have that finance, it means they will grow more slowly, so we anticipate this year a lot of borrowing will take place at concessional interest rates," he added.

He said the interest rate on IMF money borrowing to some countries is half percent.

"That is a concessional rate and we anticipate an increase this year of maybe 2 billion dollars or 2.5 billion dollars of additional borrowing from Africa to help countries tied all over during this crisis period," Nellor added.

Earlier in his welcome address, the Nigerian labor minister said Nigeria' s economic problem is not caused by the global economic crisis, but is principally based on the fact that there are inherent structural problems within the country's economy.

Kayode said what Nigeria requires from IMF at the moment is very strong beneficial support.

According to him, the World Bank did a report on the last 10 years of economic activities in Nigeria and the conclusion is that even though Nigeria has an across-the-board economic growth of between 7 and 8 percent, there is no commensurate growth in the number of the employment created.

He said his ministry had taken up the issue of rising unemployment rates and had adopted a number of policy measures aimed at redressing the situation.

"I believe IMF and all other international partners must assist us to see how we can tackle the issue of unemployment," he added.

Special Report: Global Financial Crisis