Share

Africa needs strong policies to tap into potential, says IMF

Harare - Sub-Saharan Africa is a region of tremendous potential and will be able to tap into this potential in the coming years, according to the International Monetary Fund.

Speaking at a press conference over the weekend, IMF African Department director Abebe Aemro Selassie however said reaping this potential requires strong and sound domestic policy measures.

He said sub-Saharan Africa needs to prioritise three issues to foster stronger and durable economic growth.

Macroeconomic stability

Selassie said the first priority is renewed focus on macroeconomic stability.

"This we think is the prerequisite to realise the tremendous potential that the region has," he said, adding that for the hardest hit multi exporters, fiscal consolidation will be very important with a strong emphasis on revenue mobilisation.

"Elsewhere exchange rate flexibility is another issue. Wherever there is scope for exchange rate flexibility, I think that flexibility has to be used, including by eliminating the exchange restriction to help absorb the shocks that these countries are subject to."

He added that higher revenue mobilisation is needed to safeguard debt sustainability while investment spending needs to be more efficient.

Structural reforms

Selassie said the second priority should be structural reforms to help support macroeconomic rebalancing.

“This includes reforms like revenue mobilisation with a focus on shifting away from relying on commodity-related revenues and debt financing to more robust sorts of tax revenue,” he said.

Economic diversification

“Finally, policies to foster economic diversification will be very important in the coming years, again with a view to moving countries away from commodity dependence where that is the case.”

Selassie said another important area of focus, particularly at this juncture, is strengthening social protection mechanisms to help alleviate the impact of the current slowdown on the most vulnerable groups.

“Existing social protection programmes in the region are often fragmented, not particularly well targeted, and generally cover a very small share of the population.

“We see tremendous scope to better target these programmes and use the savings from aggressive spending on other parts of the budget to better target these resources to help vulnerable groups,” he said.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.3%
Rand - Pound
23.95
-0.2%
Rand - Euro
20.47
-0.0%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.3%
Platinum
911.00
+1.6%
Palladium
1,012.02
+1.0%
Gold
2,213.44
+0.9%
Silver
24.79
+0.6%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders