We received the following from Nkole Chitalathe.
The World Bank says African banking systems including Zambia’s were unlikely to face a credit crunch or suffer from the turbulence rocking the United States banking system. The bank also said the financial crisis in the United States would not affect the talks on economic partnership agreements (EPAs). World Bank chief economist for the African region Shantanyanan Devarajan said the banking crisis would not significantly affect the EPAs since the talks had no impact on capital and fiscal flows. Mr Devarajan was speaking during a video conference briefing yesterday, two days before the annual meetings of the International Monetary Fund (IMF) and the World Bank. The annual meetings of the World Bank and the IMF will be held on October 12 and 13 in Washington, DC.
Finance and National Planning Minister Ngandu Magande will lead theZambian delegation. He said though some African banking systems had significant foreign ownership, the parent banks were typically not in the USA Mr Devarajan said foreign ownership of shares in the largest economies, Nigeria and South Africa were less than five per cent compared with a developing country average of 40 per cent. He, however observed that a cut back in foreign capital flows could seriously affect growth and poverty-reduction. He said that the surge in Foreign Direct Investments (FDI) and loans over the past five years had been used to finance the much needed infrastructure investment saying a slow down in the flows could result in most investments being postponed. He said the bank was considering a variety of options to help cushion African economies from the many risks they faced. Meanwhile the bank said the increase in food and commodity prices could be an opportunity for farmers to increase production. He said Governments of various countries should promote agriculture by providing farmers with equipment, fertilisers and markets ifagricultural growth was to be enhanced.