* Ministers urge rich nations to prevent prolonged slump
* Central banks exit from easy monetary policy poses risk
* IMF's Sayeh optimistic about Africa's growth prospects
* IMF sees Africa expanding 6.1 percent next year
By Lesley Wroughton
WASHINGTON, April 21 African finance ministers
told their rich nation counterparts at weekend meetings of the
International Monetary Fund and World Bank to work harder and
faster to kick-start their economies to avoid a prolonged slump
that could undermine strong growth in the developing world.
"We are concerned," Nigerian Finance Minister Ngozi
Okonjo-Iweala said at the meetings of global finance leaders.
"If we continue to see slow growth in the euro zone, which
provides a large market for many African countries, and is
coupled with a slowdown in emerging economies, then we will
become more vulnerable," Okonjo-Iweala told a news conference of
African finance ministers. "We need to insist that our partners
in other parts of the world work harder and faster."
Despite a global economic slowdown in 2012, most African
economies grew at close to 6 percent buoyed by strong internal
demand and higher commodity prices. Strong and better managed
economies have also attracted investors' attention, with net
capital flows to the region reaching a record $54.5 billion last
year, an increase of 3.3 percent from 2011.
But figures released by the World Bank last week showed that
most of the world's poor are now concentrated in Africa despite
increased economic growth.
African economies are also hobbled by poor infrastructure,
high unemployment and growing inequality. The region also
remains vulnerable to droughts and floods, and pockets of
Okonjo-Iweala said the region was concerned with how central
banks in advanced economies planned to exit from years of easy
monetary policy, which has led to a surge in investment capital
in emerging and developing countries.
Aggressive stimulus from central banks in the United States,
Britain, the euro zone and now Japan has so far failed to spark
a reliable recovery, and questions are already being raised over
how much more monetary policy can - or should - do.
Okonjo-Iweala emphasized it will be important for central
banks to signal early on when they intend to change course.
"The signaling should be given ahead so we can prepare our
economies for what the consequences might be, is important
because we don't want to precipitate a situation in which money
suddenly flows out of the countries," she said.
"But also, for us, we should be looking at our own
instruments that we can apply should we have problems with
volatility that arises out of some portfolio flows that might
have come in," she added.
Cameroon's finance minister, Alamine Ousmane Mey, said
African economies had built up more resilience to withstand
economic downturns. Increased trade with the BRICS emerging
economies of Brazil, Russia, India, China and South Africa has
also helped, he added.
"The BRICS countries which allow us to diversify our trade
and rebalance a situation where growth in advanced economies has
slowed down," he said.
While Africa has witnessed booms before, many question
whether this time Africa's growth takeoff will stick. New IMF
research finds that it is likely to stay on course if countries
maintain the strong economic policies of the past 10 years.
Antoinette Sayeh, the IMF's director for Africa, believes
the region has turned a corner.
"We certainly are optimistic that growth will continue to be
robust and have an uptick as global growth itself recovers,"
Sayeh told Reuters. "We think the conditions that underpin this
robust growth in the past are still very much there, that is
good macroeconomic management in many countries, good commodity
prices, strong investment both domestic and foreign investment
in a number of countries."
Last week, the IMF forecast that Africa will grow at 5.6
percent this year and picking up to 6.1 percent in 2014, with
Ivory Coast and Mozambique growing at the fastest clip.
Sayeh said a sustained stagnation in Europe and sharp
downturn in investment by large emerging economies posed the
biggest risks to the region. "Could it derail growth? Our
assessment is that, absent a truly dramatic shock to the global
economy, probably not because it is not just externally
propelled growth, it is also domestic. That is the difference,"
Sayeh, a former Liberian finance minister, said countries
should prioritize spending and those that could afford it should
rebuild their fiscal safety nets.
Turning to Kenya, east Africa's largest economy, Sayeh said
the economic outlook was "bright" following a peaceful vote on
March 4 that elected Uhuru Kenyatta, 51, as president. Elections
five years ago were marred by violence, leaving more than 1,200
dead and hammering the economy.
"Now with a clarified political scene, it is an opportunity
to see Kenya's potential takeoff. That requires a sustained
commitment and implementation of reform as we think government
intends to pursue," said Sayeh. "There is a lot of interest on
the part of investors in Kenya and sustaining the reforms will