IMF asks EAC bloc to bor­row pru­dently and in­vest wisely

For­mer EAC boss Amanya Mushega says mem­ber states should draw lessons from ad­vanced economies, and not bench­mark against peers in the Sub-Sa­ha­ran Africa

The Star (Kenya) - - News Business - ANGWENYI GICHANA @agichana

The In­ter­na­tional Mone­tary Fund has urged the East African Com­mu­nity states to en­sure bor­rowed money is pumped into lu­cra­tive projects to mit­i­gate re­pay­ment chal­lenges.

The IMF has pro­jected the EAC bloc will grow at an av­er­age of six per cent in 2016, far much higher than two per cent av­er­age growth for sub-Sa­ha­ran coun­tries.

IMF di­rec­tor for the African depart­ment Abebe Se­lassie said the EAC is fac­ing a chal­lenge on how to sus­tain the growth mo­men­tum in the medium term. He urged the EAC coun­tries to en­sure scaled-up pub­lic in­vest­ment and in­creased bor­row­ing trans­lates into eco­nomic growth, and avoid a sit­u­a­tion where debts sur­pass their na­tional wealth.

“Faster eco­nomic growth within the EAC is there­fore a po­ten­tial game-changer as it holds the prom­ise of im­proved pro­duc­tiv­ity, com­pet­i­tive­ness and wel­fare gains,” the IMF of­fi­cial said. Se­lassie was speak­ing dur­ing the two-day EAC-EU-IMF Con­fer­ence on Re­gional In­te­gra­tion in Arusha, Tan­za­nia, that ended yes­ter­day.

The bloc’s for­mer sec­re­tary gen­eral Amanya Mushega said the EAC’s mem­ber states should draw lessons from ad­vanced coun­tries to de­velop their economies, and not bench­mark against peers in the Sub-Sa­ha­ran Africa.

“In­dia, Sin­ga­pore and South Africa, just to men­tion but a few, re­fused to treat them­selves that way. They aimed high, looked at the way the USA, Ja­pan, Ger­many, the UK and the USSR de­vel­oped their hu­man re­sources; copied them with the view to com­pet­ing with them and not with fel­low third-world coun­tries. And the re­sults are out,” Mushega said.

“We are not poor and beg­gars be­cause we lack money or nat­u­ral re­sources, it is our mind­set. We have put the bar too low. We will not com- pete with Gam­bia or Haiti, but with Korea, Ja­pan and China. First, for our own EAC mar­ket and se­condly for the world mar­ket.”

The EAC Sec­re­tariat said the bloc has made sig­nif­i­cant progress in trade, fi­nan­cial and macroe­co­nomic in­te­gra­tion, and in build­ing in­sti­tu­tions nec­es­sary to sup­port its unity.

“The in­te­gra­tion process is ben­e­fit­ing the East African peo­ple through in­creased trade, ef­fi­ciency and pro­duc­tiv­ity, and en­hanced fi­nan­cial in­te­gra­tion,” EAC deputy sec­re­tary gen­eral for fi­nance and ad­min­is­tra­tion Jesca Eriyo said.

Mushega called on the mem­ber states to in­vest heav­ily in hu­man re­source de­vel­op­ment.

/COUR­TESY

For­mer EAC sec­re­tary gen­eral Amanya Mushega gives the key­note ad­dress at the open­ing of the EAC-EU-IMF con­fer­ence on the bloc’s in­te­gra­tion in Arusha

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