IMF calls for decisive policy from Sub-Saharan Africa

DECISIVE policy action is needed to enhance economic diversification, unleash the private sector’s potential, and address the challenges posed by climate change in the Sub-Saharan Africa, which includes Zambia.

This is according to Abebe Aemro Selassie, Director of the African Department at the International Monetary Fund (IMF) in its latest Regional Economic Outlook for Sub-Saharan Africa.

Mr Selassie stressed that creating jobs and meeting the Sustainable Development Goals would require strong, inclusive, and sustainable growth in Sub- Saharan Africa.

Climate change, he said, given Sub-Saharan Africa’s exposure to weather-related disasters and reliance on rain-fed agriculture, meant that investment in adaptation was critical.

He explained that the global green transition also provided new opportunities in light of the region’s vast potential for renewable energy.

“International financial support will still be critical to help finance the cost of adaptation, enable Sub

Saharan Africa to seize the opportunities offered by the transition to a greener economy, and to ensure fair and affordable access to energy.

“Such measures may not be easy, but they are essential if the region and the world is to benefit from the long- promised African century,” Mr Selassie said.

On economic policy, He said governments would face immediate challenges over the short run such as shielding their most vulnerable households without undermining debt sustainability.

Mr Selassie said public debt ratios were at their highest level in over two decades, and many low- income countries are either in, or close to, debt distress.

“In commodity-exporting countries, on the other hand, higher commodity prices may generate a fiscal windfall. But in light of the uncertain outlook and often- precarious fiscal positions, most of these gains should be used to rebuild policy buffers,” he said.

“Navigating this complex policy path will be difficult and many countries will require international support. The IMF is ready to help,” he said.