The Managing Director, International Monetary Fund, Ms. Christine Lagarde, on Tuesday said that the risk of a drop in world oil prices if global demand weakened was the key watch point for Nigeria.The IMF boss said at a press conference organised by the Nigerian Economic Summit Group in Lagos on Monday that policies needed to tread a fine line between defending against the global slowdown in the near-term, while also preserving fiscal resources for investment in much needed infrastructure that would help promote employment and growth.She pointed out that infrastructure gaps, particularly in the power sector, were also holding Nigeria back from its full growth potential. "Nigerias electricity generation capacity, for example, is just 10 per cent that of South Africas, while Nigerias population is more than three times greater. And high unemployment is also a critical economic and social issue. This is especially true for Nigerias young people for whom the rate of unemployment is over 35 per cent."She noted that growth alone would not suffice, job creation would be critical to ensuring that growth was both economically and socially sustainable.The IMF boss pointed out that there were 23 IMF programmes in the whole of Africa.She, however, said that there was no programme in Nigeria because the Fund believed that Nigeria was self sustaining.Lagarde said, "Nigeria does not need IMF assistance. What we do is that we just provide technical assistance to Nigeria in some areas. We do not provide infrastructural programme, its not in the IMFs mission to finance infrastructural programme. Its the World Bank that finances such projects."Speaking on the eurozone crises, she noted that the zone needed special attention, saying, "Im not obsessed with Europe, and that is why Im in Africa. At the moment, Eurozone needs special attention. Some of them are going through debt crises which could affect all other countries if not properly addressed."She pointed out that the global slowdown could be more pronounced next year than 2009 if countries did not prepare for much capacity to absorb shocks.Lagarde said that growth was set to continue at a healthy pace into next year, but spillovers from the advanced economies could threaten it in African countries.She added that the trade and financial links, which were so critical to moving the economy forward in good times, were ironically becoming the interconnections that carried todays escalating economic risks.She said, "A sustained slowdown in advanced countries will dampen demand for Africas export. And, together with continued financial market uncertainty, this will likely inhibit private financing flows, remittances and concessional financing. "The potential for greater volatility in commodity markets could cause further disruptions, with winners and losers within the region.
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