IMF dis­cusses chal­lenges to Sub-Sa­ha­ran Africa

The Pak Banker - - COMPANIES/BOSS -

The Gov­er­nor of the Bank of Botswana, Ms. Li­nah Mo­hohlo, and the Deputy Man­ag­ing Di­rec­tor of the In­ter­na­tional Mon­e­tary Fund, Mr. Min Zhu, hosted to­day in Gaborone, Botswana, a re­gional con­fer­ence en­ti­tled "Small Middle-In­come Coun­tries in Sub-Sa­ha­ran Africa-Rais­ing the Bar".

Del­e­gates in­cluded se­nior of­fi­cials from a num­ber of coun­tries rep­re­sen­ta­tives of the pri­vate sec­tor, academia, the Ex­ec­u­tive Board of the IMF and IMF staff. At the end of the con­fer­ence, the state­ment said, "We had a very pro­duc­tive set of dis­cus­sions on the eco­nomic out­look and pol­icy chal­lenges fac­ing small mid­dlein­come coun­tries (SMICs) in sub-Sa­ha­ran Africa. This group of coun­tries has made sig­nif­i­cant progress in terms of main­tain­ing macroe­co­nomic sta­bil­ity and sus­tain­ing high growth over the past two decades. How­ever, a num­ber of chal­lenges have re­cently emerged and, be­yond the im­por­tance of main­tain­ing their hard earned gains in terms of eco­nomic sta­bil­ity, there is scope to re­think their growth strate­gies and move for­ward with bold com­ple­men­tary re­forms that could fa­cil­i­tate their tran­si­tion to high-in­come sta­tus. For coun­tries that de­pend heav­ily on com­mod­ity ex­ports, the near-term en­vi­ron­ment has de­te­ri­o­rated as both global de­mand and prices have de­clined. And while some coun­tries have pre­vi­ously built sav­ings that can help them cush­ion the slow­down, other coun­tries have seen their fis­cal po­si­tions de­te­ri­o­rate rapidly at a time when ex­ter­nal fi­nanc­ing con­di­tions have tight­ened. No­tably, the slow­down of the South African econ­omy could also ad­versely af­fect the coun­tries in the re­gion.

Par­tic­i­pants con­cluded that, be­yond fol­low­ing pru­dent poli­cies that will help pre­serve eco­nomic sta­bil­ity (a pre­con­di­tion for growth), SMICs should not lose sight of the need to build re­silience, adopt more in­clu­sive poli­cies, and foster eco­nomic di­ver­si­fi­ca­tion. To this end, re­forms should be com­pre­hen­sive, yet care­fully pri­or­i­tized to un­lock th­ese coun­tries' pro­duc­tivi- ty growth. In par­tic­u­lar, coun­tries should fo­cus on in­vest­ment projects that gen­er­ate wide ben­e­fits to other sec­tors of the econ­omy in pri­or­ity ar­eas (e.g., en­ergy in­fra­struc­ture) and ra­tio­nal­iz­ing reg­u­la­tions that hin­der the de­vel­op­ment of the pri­vate sec­tor, while adopt­ing a "smart" growth strat­egy that could take ad­van­tage of and/or ad­e­quately ad­dress global mega­trends in tech­nol­ogy, cli­mate change, and de­mo­graph­ics.

Par­tic­i­pants also agreed that, for coun­tries to suc­ceed, growth will have to be in­clu­sive in terms of job cre­ation and, in a num­ber of cases, en­sure poli­cies that pro­tect the most vul­ner­a­ble seg­ments of so­ci­ety. This will likely re­quire coura­geous re­forms to re­duce skills mis­matches in the la­bor force through cost-ef­fec­tive train­ing pro­grams, adopt­ing re­forms that can lower the cost of do­ing busi­ness and fa­cil­i­tate the hir­ing of highly-skilled work­ers, and en­hanc­ing the com­po­si­tion and ef­fi­ciency of govern­ment spend­ing. Ms. Mo­hohlo noted that: "This con­fer­ence has touched on var­i­ous pol­icy chal­lenges that SMICs have in com­mon-on the one hand en­sur­ing eco­nomic sta­bil­ity and sus­tain­ing growth while pro­mot­ing in­clu­sion and so­cial equity, and on the other hand re­cal­i­brat­ing the growth strat­egy to fa­cil­i­tate the tran­si­tion to high-in­come sta­tus.

We had an ex­cel­lent op­por­tu­nity to dis­cuss the lessons and prospects of poli­cies be­ing im­ple­mented in sev­eral SMICs as well as on other coun­tries that suc­cess­fully tack­led their de­vel­op­men­tal chal­lenges and have now well­func­tion­ing and de­vel­oped mar­kets. The wide fo­rum in which the con­fer­ence took place and the re­lated peer-to-peer learn­ing strength­ened the di­a­logue among SMICs and of­fered novel views on how to tackle th­ese coun­tries' chal­lenges."

In clos­ing, Mr. Zhu said "The IMF re­mains closely en­gaged with SMICs in Sub-Sa­ha­ran Africa through pol­icy di­a­logue, tech­ni­cal as­sis­tance, and an­a­lyt­i­cal work. The con­fer­ence has also served as the launch of the book Africa on the Move: Un­lock­ing the Po­ten­tial of Smal­lMid­dle In­come Coun­tries, au­thored by IMF staff in col­lab­o­ra­tion with of­fi­cials from SMICs in the re­gion.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.