ADDIS ABABA (Reuters) - Africa must boost food production and diversify its economies into manufacturing and services to cut the impact of future shocks like the current financial crisis, the United Nations said Thursday.
The International Monetary Fund (IMF) warned this week that sub-Saharan Africa needed to prepare for tough times ahead, saying that there was no guarantee the resilience shown so far to global economic crises will continue.
Major world economies are in recession, stung by a global credit squeeze, and growth is now slowing in developing countries that had at first appeared resilient to the downturn.
Abdoulie Janneh, head of the U.N.’s Economic Commission for Africa, said the current financial crisis would have an impact on investment, trade, remittances and tourism revenues.
Several African nations had also seen volatility in their stock markets and currencies, he told African Union (AU) foreign ministers meeting ahead of a February 1-3 summit in Ethiopia.
“However, we should not panic, but use the current crisis as an opportunity to consolidate recent macroeconomic achievements and for putting measures in place to further diversify our economies,” Janneh said.
“We need to increase agricultural production and diversify into manufacturing and services in order to provide jobs ... Diversification will also give our economies the resilience to deal with future economic shocks.”
Wednesday, a senior World Bank official told AU officials initial hopes that the world’s poorest continent might be spared the worst of the global credit crunch were premature.
Monday, the IMF warned that higher food and fuel costs had put pressure on inflation and external balances in Africa, and said the deepening financial turmoil could curb regional growth through lower capital flows and export revenues.
Reporting by Daniel Wallis; Editing by Sophie Hares