A benign global economy, debt relief and progress with structural reforms give Africa a rare opportunity to accelerate economic growth, the deputy head of the IMF said on Friday.
Speaking on his first visit to sub-Saharan Africa since taking over as first deputy managing director in September, John Lipsky said the continent should seize the opportunity to push through more economic reform.
”This is a special moment for Africa,” said Lipsky, repeating comments he made late on Thursday.
”The combination of a favourable external environment, the opportunities brought by debt relief and the success of reforms are opening the way to a new period of even stronger growth for people in the countries of Africa.”
Inflation in the region was at its lowest in a quarter of a century while economic growth in the past two years had been the fastest in a decade, he told West African ministers at an International Monetary Fund meeting in Mali’s capital Bamako.
He said the growth was an ”unexpected success” for sub-Saharan Africa’s economy, which the IMF forecasts will grow 5,4% this year and 5,9% the next.
”The challenge now is to accelerate and sustain this growth while keeping inflation low,” Lipsky told the meeting, called to discuss how West African governments can best manage an anticipated increase in aid flows to the region in coming years.
He said he hoped progress made so far would encourage African countries to push through further economic reforms to strengthen the management of public finances.
Although Africa’s projected growth puts it ahead of the world economy, IMF economists warn it is still not strong enough to meet the so-called Millennium Development Goals for halving poverty by 2015 as well as combating diseases such as malaria.
”Despite the good performance of our economies, poverty has not been reduced as desired,” Mali’s Finance Minister Abou-Bakar Traore said. ”Our countries must improve their capacity (to ensure the efficiency of aid).”
Too many constraints
Critics of international institutions like the IMF and World Bank say too many conditions are set for debt relief, such as the privatisation of state-run utilities.
”These measures can sometimes aggravate poverty,” Coulibaly Salimata Diarra, president of the Mali consumers’ association, told Reuters, complaining for example that electricity prices had risen sharply when Mali’s state energy firm was privatised a few years ago. The firm has since been returned to the state.
But others said relations with donors had improved.
”There are times when we have the impression the relations between our countries and certain of our partners are really a school teacher face to face with a pupil, and we have to take the baccalaureat or some other exam,” Toure told Reuters.
”[Lipsky] coming to see us and talk directly with us … is extremely important,” he said.
Trade officials say rich nations must do more to dismantle subsidies, particularly for farm products such as cotton, if living standards are to improve in the poorest continent.
Visiting cotton farmers in the southern Malian region of Kouli-Koro on Wednesday, Lipsky pledged to help promote more open markets for their products.
Cotton is key to West African countries like Mali, where farmers and governments say they can not compete with subsidised growers in the United States, the world’s top exporter.
More than 20-million Africans, mostly in Mali, Chad, Burkina Faso and Benin, have been hurt by US cotton subsidies worth more than $4-billion in 2004/05 for 25 000 US producers. ‒ Reuters