Conflicts threaten sub-Saharan Africa's growth prospects

by Trust Matsilele 0

The International Monetary Fund’s (IMF) Regional Outlook Report has stated that more home-grown risks were threatening growth prospects.

“In a few cases policy missteps, such as large fiscal imbalances, threaten to undermine the hard-won macroeconomic gains of recent years that have supported growth. More problematic still, in a number of countries conflict is exacting a heavy toll, most acutely so in the Central African Republic and South Sudan.”

The IMF further stated that ceaseless conflicts were threatening a spill-over effects on some neighbouring countries.

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Terror threats were also noted as a major concern due to its associated adverse implications on stability and pursuit of development projects.

The IMF also pressed the sub region to give greater emphasis in the coming months on sustaining the macroeconomic stability that has underpinned high growth the region has enjoyed in recent years.

The past decade has seen significant growth in the region chiefly due to sound policies and foreign direct investments (FDIs).

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“Supported by sound economic policies, debt relief, stronger institutions, and high investment, many countries in sub-Saharan Africa have now sustained 5–6 per cent growth rates for more than a decade, in the process bringing down poverty and improving living conditions.”

The IMF also called on the region to ensure shared growth and curb food shortages.

“There is scope to make growth in the near term more inclusive by facilitating job creation, promoting financial inclusion, and raising productivity in agriculture, where most of the population is employed.”

“These objectives can be pursued by improving the business climate, providing better technical training,  reducing financial transaction costs, and exploiting new technologies such as mobile banking.”

The IMF noted that the effectiveness of monetary policy will require a number of reforms, including instruments to manage excess liquidity, high-frequency data to guide timely intervention, sound analytical models to forecast inflation, and a clear communications strategy to anchor expectations.

“The region’s recent strong period of economic performance thus looks set to be sustained, supported by stronger global economic activity spurred by the improved outlook for the advanced economies,” stated the Regional Outlook Report.