The IMF is projecting solid economic growth for Sub-Saharan African
By Paul Ndiho
September 28, 2011
The International Monetary Fund is forecasting solid economic growth for Sub-Saharan African countries. Their prospects are high, but a slowing global economy poses some risks. The IMF says the economic crisis in the developed world, could become a crisis for developing countries– and despite the drought and famine in the Horn of Africa, growth prospects for Sub-Saharan Africa remain robust.
Recent economic developments are however expected to reduce the momentum. The downside risks to the current forecast are significant according to the IMF’s Director for Africa.
“Financial markets volatility and sharp slowdown in growth in advanced economies, it would affect Sub-Saharan Countries Of course by sub-doing the demand for the regions exports and private financial flows which have been significant in the region in the past couple years, therefore restricting in the regions integrated economies and the middle income countries in particular.”
Sayeh noted that in middle income countries like South Africa where unemployment is high and growth has been severely affected by the global economic crisis. Meanwhile, African Oil exporters are enjoying the fruits of their oil export because of the high prices. Despite this good news the IMF Africa director says there is a significant down side risk for the outlook on the global economy.
“Most low income countries have been doing well. One third of them are expected to grow by 6% this year but the poor households have been hit hard by the rising food and fuel prices and the famine that has devastated the Horn of Africa.”
Commonwealth Finance Ministers also met to discuss developing and emerging countries in the fields of international monetary funding and development finance. The group called on the international community to strengthen delivery and the use of aid in order to make it effective in creating jobs, improving livelihoods and combating poverty.
Pravin Gordhan, South Africa’s Finance Minister noted that the manner in which aid is delivered may also impact domestic accountability of both partner and donor countries.
“It is generally accepted that we need to move away from Donor recipient relations to one where we encourage development partnerships and this is where even if these economies among the 54 nations of the commonwealth might be small and numerically on the margin, they are important potential sources of demand and growth as we go forward.”
Analysts say that prior to the crisis– and following more than a decade of steady growth and debt relief African economies have strengthened. But, now if the economic situation in high income countries continues to deteriorate significantly beyond what is currently envisaged in the baseline scenario– growth in Sub – Saharan countries might be downgraded beyond the current moderate slowdown.