Abuja — The Federal Government has predicted that foreign aid, which is important for a number of African countries, is likely to diminish in the coming years as a result of the global economic crisis.

This is following drastic reduction in the foreign direct investments in Africa as the credit squeese takes hold.

This was made known by the Vice President, Dr. Goodluck Jonathan, in a keynote address at the opening ceremony of the ongoing annual conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja.

Represented by the Minister of Finance, Dr. Mansur Muhtar, the Vice President said, "This has also contributed to the problems within our banking sector, which has led to the quick intervention of the Government through the Central Bank of Nigeria to forestall its collapse. This intervention is similar to that of the developed countries such as in the European Countries and the United States of America (USA) that had to bail out some of their banks, insurance companies and even the manufacturing sectors". He contintinued, "I must state here that whilst the full effects of the global slowdown remain uncertain and vary between countries, it is clear that the impact on African countries although, initially limited, had become, in some cases severe".

"We should be wary of any quick turnaround for our continent because even if global recovery of African economies may take longer time. The major challenge therefore, is on how to implement short term responses to the crisis while staying focused on long term sustainability".

According him, the resolution of the London G-20 meeting in addressing the key issues of restoring growth, financial stability and the needs of emerging countries must be commended. "Also, the International Monetary Fund (IMF) concluded its Article IV Consultation Mission with the Nigerian authorities on July 29, 2009 and noted that Nigeria entered the global financial crisis from a position of strong macroeconomic stability", he added.

He argued that the reforms of recent years paid off, with windfall from oil, high foreign reserves, and a well capitalised banking system preventing the type of economic crisis Nigeria witnessed during the oil price cycles of the early 1980s.

The impact of the crisis, he noted, has nonetheless been significant with economic growth suffering. "Growth in 2009 and 2010 was expected to fall below the impressive rates of recent years.

Leadership (Abuja)