Higher financial reserves have helped cushion the shock of increased oil prices in Sub-Saharan Africa, the International Monetary Fund's top official for Africa said on Friday.
Abdoulaye Bio Tchane, director of the IMF's African department, said sustained improvements in macro-stability on the world's poorest continent had led to higher reserves.
IMF data shows reserves in Sub-Saharan Africa have steadily risen over the past decade, increasing to about $55.1 billion from $40.6 billion last year, and are forecast to grow further to $66.8 billion in 2005.
"It's easier for those African countries to face the shocks because then they clearly could adjust (by) tapping those reserves without resorting either to further adjustment or to requesting more resources," Bio Tchane told reporters before the start of the IMF-World Bank meetings in Washington.
His remarks were backed by his deputy, Siddharth Tiwari, who said improvements in the countries were due to reforms and increased trade with the rest of the world.
"At this time with the oil price shock, absorbing the shock has been made easier, both through flexible exchange rates (and) the use of reserves," Tiwari added. "But the fact is that reserves right now have provided the cushion which perhaps may not have existed around five years back," he added.
Oil prices topped $50 a barrel on Friday, as Group of Seven finance ministers, meeting before the start of IMF-World Bank meetings on Saturday, discussed ways to deal with higher oil prices and their threat to global economic growth.
Bio Tchane said the challenge for Africa was to implement policies that protect macroeconomic gains, while lifting growth and reducing poverty.
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