Nigerian Central Banker Raises Alarm Over Euro Zone Crisis

Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, yesterday raised the alarm of a possible spillover of the economic woes in the Euro Zone to sub-Saharan Africa.

Speaking at the ‘Regional Conference on Post Economic Reforms: Implications for Sustained Economic Develop-ment in the ECOWAS’, organised by the West African Institute for Financial and Economic Institute (WAIFEM) in Abuja yesterday, Sanusi said: “At this time, we must, as a region, be readily prepared for the likely consequences or spillovers of the Euro zone crisis on our economies and financial systems.”

According to him, “in many EU countries, spillover risks from the financial and economic woes in the Euro area periphery have intensified and with weakened growth and sluggish transition from public to private demand in the United States, there are concerns about upsurge in financial volatility.”

The positive outlook, however, he said, was that in the sub-Saharan Africa, many countries were gaining momentum with solid macroeconomic performance that even surpasses the pre-crisis averages.

“The current global slowdown has not significantly affected the region thus far, though downward risks have risen. Africa is largely shielded from the global financial crisis because of limited integration to the global economy and the international financial system.

“While the humanitarian crisis in East Africa poses further threats to many African countries,” Sanusi said.

He said an average growth rate for most economies in the region was projected at six per cent on the back of strong domestic demand and accelerating exports.

For the countries, he said the CBN had, in recent times, adopted monetary tightening measures in order to curtail inflationary pressures and sustain financial stability. “In September 2011, the monetary policy rate our anchor rate was increased by 50 basis points to 9.25 per cent, while the cash reserve requirement for the banks was at four per cent. Growth rate has been robust, although recent security challenges remain a threat to investors’ confidence.”

Speaking earlier, Director-General of WAIFEM, Prof. Akpan Ekpo, had said the two-day conference, organised in collaboration with ECOWAS, was meant to “brainstorm and provide a road map for leapfrogging our sub-region into sustained economic development.”