Sub-Saharan Africa growth taking off, says IMF chief

29 May 14
The head of the International Monetary Fund has said sub-Saharan Africa is ‘taking off’ with strong and steady economic growth, but poverty remains unacceptably high across the continent.

By Judith Ugwumadu | 29 May 2014

The head of the International Monetary Fund has said sub-Saharan Africa is ‘taking off’ with strong and steady economic growth, but poverty remains unacceptably high across the continent.

Speaking at the Africa Rising conference in Maputo, Mozambique today, IMF managing director Christine Lagarde said the region had shown remarkable resilience in the face of the global financial crisis.

However, she warned ‘the tide of growth [had] not lifted all boats’ as poverty still afflicted 45% of the regions households. ‘Inequality remains high. And some countries, still facing internal conflict, are struggling to exit from fragility.’

Africa is expected to grow by about 5.5% this year and next, and the poorest countries even faster, close to 7%, she highlighted.

There were risks to this positive outlook from slower growth in advanced economies and in particular emerging economies which are major trading partners for Africa. The region must ‘keep a firm eye on what’s going on beyond its horizons’, she said. ‘Globally, even as the world turns the corner of the Great Recession, the recovery remains weak and uneven.’

To tackle these challenges, Africa’s policy priorities must be to ‘build infrastructure, build institutions and build people’.

She added: ‘The investment needs for the region are estimated at about $93bn – annually. In most cases, the investments are large and upfront. They need to be carefully selected, managed and implemented within medium- to long-term budget perspective.’

There also remained a need to build institutions there to improve governance and transparency and ensure sound economic frameworks.

‘We all know that Africa has tremendous potential – it is home to more than 30% of the world’s mineral reserves. Properly managed, these endowments offer unparalleled opportunity for economic growth and development.’

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