Okonjo-Iweala: ready to respond
| Okonjo-Iweala: ready to
The World Bank is preparing to revive its emergency facility to
help countries affected by food price rises, in the wake of
street riots last month over the surge in cost of essential
goods such as wheat and bread.
Ngozi Okonjo-Iweala, a managing director at the Bank and
former finance minister of Nigeria, said the volatility in food
prices are a key risk for countries affected by the food crisis
two years ago.
The 2008 crisis pushed millions of people into poverty, she
added. It led the Bank to establish a $2 billion Global Food
Crisis Response Programme, of which some $900 million has been
We have sent to our board a request to reactivate the
facility, because we have got the mechanism ready to go,
she told Emerging Markets. With that we will be
able to respond again.
We have readied ourselves to be able to kick in should
we have difficulty with food prices again.
Since mid-June, global grain prices risen strongly with a
56% rise in global wheat prices and knock-on impacts on other
commodities such as rice, maize, and sorghum.
Okonjo-Iweala said she did not believe the world was in the
middle of a food crisis, as a strong harvest in the USA had
offset crop failures in Russia. Nevertheless volatility
remains a key risk, she said. The crisis threw 64
million more people into poverty. Isnt that a big issue
to look at?
Fears over food security have marred what Okonjo-Iweala sees
as a potential opportunity for Africa and other low-income
countries to close the wealth gap between rich and poor.
The Bank forecasts that sub-Saharan Africa will enjoy
economic growth of 5.1% next year, double the rate of the high
income nations, which will grow by 2.4%.
Developing countries are providing 50% of world
growth, and this is not just a phenomenon of China and
India, she said. If you think of Africa approaching
a population of a billion people, that provides a strong
market. People should change their perception and the way they
Africa is increasingly seen as a good investment
opportunity. It is the wise investor that gets in now
because the returns are substantial, Okonjo-Iweala
She urged countries to focus on building institutional
capacity, regulatory frameworks, revenue collection systems and
judicial to create the right environment for investment.
We need not to stand back now, she said.
We need to invest in public-private
Okonjo-Iweala pointed out that the International Development
Association (IDA), the banks funding arm for low-income
countries, had invested $7.6 billion last year of which $3
billion went on infrastructure.
EM VIDEO EXCLUSIVE: World Bank MD lays out
vision for Africa