Economic prospects for Africa promising: IMF - CNBC Africa

Economic prospects for Africa promising: IMF

Special Report

by Trust Matsilele 0

The IMF is convinced over African growth prospects. PHOTO: Getty Images

The International Monetary Fund (IMF) said regional countries need to find a balance between strengthening reserve positions and ensuring appropriate social spending.

"African countries should continue with their efforts to preserve macroeconomic stability and build resilience," noted IMF's managing director Christine Lagarde and chairperson of the African Caucas- Bader Mahmoud Abbas at a press briefing after the African Consultative Group meeting at the IMF headquarters in Washington.

The African Consultative Group comprises the Fund Governors of a subset of 15 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management.

It was formed in 2007 to enhance the IMF’s policy dialogue with the African Caucus. The Group meets at the time of the spring meetings, while Fund Management meets with the full membership of the African Caucus at the time of the annual meetings.

“Africa has the potential to generate sustained economic growth and further reduce poverty. For most low-income countries and natural resource exporters, diversifying economic activity and exports is an important goal to boost resilience and generate employment opportunities to an expanding young labour force,” IMF added.

(READ MORE: Growth projected for Africa in 2014)

The Fund also pointed to the need for political stability and regional peace, ingredients viewed as necessary for Africa's economic development.

However, Abbas noted the need for Africa to wean itself from dependency on trade especially with China.

"African countries recognize that they need to do a rebalancing of their own and generate growth in sectors like manufacturing and agriculture that can benefit the population in terms of employment opportunities, including through tackling infrastructure and energy gaps,"he said.

The IMF says it will continue supporting the region through financial incentives as to sustain growth of the emerging economies and promote stability.

“We will continue devoting resources to assist North African countries that are going through transition and fragile states to ensure economic stability and build resilience,” Lagarde said.