Nigeria and other African countries need long term partnerships and foreign direct investments by G20 nations to help deliver the necessary infrastructure to unlock sustainable growth in African economies, Minister of Finance, Kemi Adeosun, has said.
The Minister was speaking during a G20 Finance Ministers’ meeting called by China in Paris to discuss issues aimed at making reform in the world’s financial architecture to promote sustainable and inclusive growth for Africa. China is G20 Chair this year.
Mrs. Adeosun, who called for more inclusive growth for Africa, said more understanding and flexibility were essential to grow and protect key markets in Africa.
Such understanding, the Minister explained, was necessary to allow African countries attain the level of economic growth achieved by developed countries when they were at the current stage of Africa’s development.
The high-level seminar which assessed volatility in capital flows and their impact on global economic conditions, also discussed current challenges to the international financial market, including ways to combat macroeconomic volatility.
Mrs. Adeosun was speaking at the opening plenary session alongside Managing Director of the International Monetary Fund, IMF, Christine Lagarde; Governor of the Banque de France, François Villeroy de Galhau, Vice President of the European Commission, Valdis Dombrovkis, and Germany Minister of Finance, Wolfgang Schauble.
Noting the progress made in the international financial market since the 2008 global financial crisis, the Minister said the first line of defence was sound macroeconomic policies, which Africa in general, and Nigeria in particular try to tackle with series of fiscal initiatives.
The minister frowned at excessive focus on gross domestic product, GDP, as a measure of economic progress, pointing out that this often concealed vulnerability, particularly inequalities.
She called for a more holistic measure of economic growth, while highlighting the risks associated with international capital flows.
African economies, she warned, need to be insulated from the disruptive effects of volatile short term portfolio flows and embrace long term partnerships to ensure sustainable and inclusive growth.
“Africa can build the necessary resilience to grow, but there must be more careful management of capital flows and a move towards long term and sustainable growth,” the minister explained.
She said an essential component of more careful management of capital flows was to build better economic mapping and surveillance to manage risks and spill-overs, pointing out that this should be a priority for G20 Finance Ministers.
French Minister of Finance and Public Accounts, Michel Sapin; Minister of Finance, Germany, Wolfgang Schäuble; Chancellor of the Exchequer, United Kingdom, George Osborne; Minister of Economy and Finance, Italy, Pietro Carlo Padoan, were also part of the meeting.
Other participants included Vice President of the European Commission, Valdis Dombrovkis; the Governor of the People’s Bank of China, Zhou Xiaochuan, and Governor of the Banque de France, François Villeroy de Galhau.