adminworld,” as she met officials in Nigeria on her first visit to Africa as head of the fund.
“What is happening in advanced economies, particularly in Europe, is obviously of concern for everybody around the world at the moment,” she said while meeting Nigerian Senate President David Mark.
“Because the severity of the crisis and the difficulty that the Europeans have in dealing with the crisis will have a ripple effect in all economies of the world.”
The IMF managing director said poorer nations, particularly those that rely heavily on Europe for trade and investment, should prepare themselves to endure any potential fallout.
“But what we are saying to all developing economies is beware of what is happening in advanced economies at the moment,” she said.
“Beware of the clouds that are accumulating at the European skies and make sure that you have enough reserves, enough resistance, enough cushion to actually weather the storm.”
European Union finance ministers raced against the clock yesterday to meet a self-imposed deadline to raise US$260 billion for new eurozone bailout funding.
The target figure and a 10-day deadline to deliver the cash pledges to the IMF was decided by EU leaders in the early hours of a December 9 summit and effectively expired at midnight.
The aim is to allow the Washington-based institution to come to the aid of eurozone countries in trouble.
“From the IMF perspective, we try to understand what the connections are, and how inter-connected the countries can be,” Lagarde said when speaking of the risks to developing nations.
“And what we see is stalled growth in advanced economies with potential recession in some of the European Union countries, including my own country of course (France), and channels of contagions which can be different,” she said.
“They can be financial channels because the banking system of European countries has scattered all over the map and they have subsidiaries and counterpart risks that are present.”
The former French finance minister said the impact on trade and foreign direct investment were also areas of concern.
Lagarde also held talks with President Goodluck Jonathan after meeting Finance Minister Ngozi Okonjo-Iweala, a respected former World Bank managing director, and other Nigerian economic officials. She said she
was impressed with economic reform plans being pursued by the government in Nigeria, Africa’s largest oil producer and the continent’s most populous nation.
Lagarde is expected in the economic capital Lagos today for a forum on Africa’s future before moving on to the neighbouring nation of Niger.
She is also expected to visit South Africa in the coming weeks, but details are to be released later, an IMF official said. – AFP.
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