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 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.
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