This comes as the multilateral financier’s latest ‘Regional Economic Outlook for Sub-Saharan Africa shows that the region’s growth has fallen to its lowest level in more than 20 years.
According to the IMF report, although the continent’s economies have largely suffered from “a very substantial commodity price shock”, insufficient policy adjustment is also to blame for the general economic slowdown.
For instance, “the delay in implementing critical adjustment policies is leading to higher public debt, creating uncertainty, holding back investment, and risks generating even deeper difficulties in the future,” reads part of the IMF report.
IMF’s head of the African department, Abebe Aemro Selassie has said strong policies can be the panacea to the continent-wide slowdown.
“Sub-Saharan Africa remains a region with tremendous potential for growth in the medium term, but with limited support expected from the external environment, strong and sound domestic policy measures are urgently needed to reap this potential,” he said.
And the three priority policy areas that he points out include: improve macroeconomic stability through fiscal consolidation; addressing structural weaknesses to support macroeconomic rebalancing, and strengthening social protection for the most vulnerable people.
IMF statistics show that economic growth slowed for two thirds of countries in the region bringing down average growth to 1, 4 percent last year. However, a timid recovery in growth to 2, 6 percent – is expected this year, although the IMF maintains that “the underlying regional momentum remains weak, and at this rate, sub-Saharan African growth will continue to fall well short of past trends of 5-6 percent…”