Johannesburg - The worst of the global economic crisis may be over but lingering risks and structural overhang from the financial turmoil may slow the recovery, central bank governor, Tito Mboweni, said on Tuesday.
And African countries must remain vigilant in efforts to pull out of recession due to their dependence on global trade and commodity prices, he said.
Mboweni, speaking at an accountants' association dinner, said improvements for many economies in Africa depend heavily on a rebound in trade and investment flows, which had fallen sharply over the past two years.
"There seem to be increasing signs that the worst of the global recession is over, (but) the outlook is still clouded by many uncertainties," Mboweni said.
"There are many risks out there and many structural overhangs of the financial crisis which are likely to prevent a fast and smooth recovery."
Some African countries have come through the global downturn relatively well but growth, including in South Africa, has been hit, eroding many of the strides to alleviate widespread poverty.
South Africa's economy, the biggest on the continent, slumped into its first recession in 17 years at the start of the year, and Mboweni said earlier in the day - when announcing no change in the bank's repo rate - that the country's recovery was likely to be slow.
"In South Africa, we have been relatively insulated but also affected in one way or another through capital flows and trade contraction," he said, adding that still weak levels of trade and capital flows were a concern for African policymakers.
"Our continent remains very dependent on exports and commodity prices and, therefore, we need to remain vigilant on the way forward."
Mboweni said South Africa's fiscal discipline, when economic growth was strong, had proved to be prudent and appropriate and had allowed for expansionary fiscal policy and monetary accommodation.
"As a whole, we have come through alright," he said.
The central bank monetary policy committee decided to keep its repo rate steady at 7% on Tuesday, with Mboweni citing balanced risks on inflation and early signs of a turning point in the domestic recession.
- Reuters