Economic Crisis Heightens Africa's Conflict Tensions: OECD.

"The global economic crisis has heightened the risk that 'tensions could explode' in Africa, where growth will be slashed this year because of recession in rich nations, the Organization for Economic Co-operation and Development (OECD) warned Monday. 'There are signs of increasing political tension that cannot be ignored,' said a report by OECD, African Development Bank (AfDB) and UN Economic Commission for Africa which said the continent's growth would be cut to 2.8 percent this year after 5.7 percent in 2008...." [Agence France Press (5/11)/Factiva]

Reuters adds that "...budget deficits across the region will balloon as falling commodity prices and demand from Western countries take their toll, the African Economic Outlook 2009 said, forecasting a budget deficit of 5.5 percent of output, which compares with a surplus of 3.4 percent seen in the previous annual study.... 'Africa has been hit and it has been hit hardest,' AfDB chief economist Louis Kasekende told journalists at the bank's annual meeting, held this year in the Senegalese capital. He called on African governments to resist the temptation to resort to protectionist measures as they attempt to support ailing economies...." [Reuters (5/10)/Factiva]

G20 Backs Rescue Funds Boost As Crisis Summit Looms.

G20 finance ministers promised money on Saturday to rescue troubled emerging market economies. Ministers from the world's largest economies also pledged to regulate hedge funds and start closer checks on credit ratings agencies to prevent a repeat of the financial crisis.

'We are committed to deliver the scale of sustained effort necessary to restore growth,' the ministers said in a statement promising extra money for the International Monetary Fund (IMF) and regional lenders such as the Asian Development Bank (ADB).

Besides the IMF and ADB, the G20 finance ministers said they would review the capital needs of African Development Bank (AfDB) and the Inter-American Development Bank (IDB) at the annual meeting this year and called on the European Bank for Reconstruction and Development (EBRD) to 'promptly review its statutory capital constraints to give leeway to interventions'. This was urgent because Eastern European economies are in crisis.

It has been reported that the technical details of the deal to provide the [IMF] with additional resources were not finalized at the weekend but Japan has already signed a deal with the fund to provide a loan worth $100 billion. The US is seeking to increase the funding by extending the New Arrangements to Borrow facility, under which 26 of the fund's members agreed in 1998 to lend it up to $50 billion at times of crisis.

Spain's portion of a possible $250 billion increase in funding for the IMF would be in the order of $3 billion, Spanish Finance Minister Pedro Solbes said Saturday. Solbes said the cash would come from central bank reserves.