By Ousman A. Marong
The Resident Representative of the International Monetary Fund (IMF) PHD Ruby E.M Randall has revealed that the Sub-Saharan Africa is set to enjoy a modest growth uptick, and decisive policies that are needed to both reduce vulnerabilities and raise medium-term growth prospects.
“Average growth in the region is projected to rise from 2.8 percent in 2017 to 3.4 percent in 2018, with growth accelerating in about two-thirds of the countries in the region aided by stronger global growth, higher commodity prices, and improved capital market access. On current policies, average growth in the region is expected to plateau below four percent, barely one percent in per capita terms and over the medium term. Turning the current recovery into sustained strong growth consistent with the achievement of the SDGs would require policies to both reduce vulnerabilities and raise medium-term growth prospects,” she remarked.
She made these remarks recently at a forum held at Ocean Bay Hotel in Bakau Cape Point. The forum was organised by IMF to present the April 2018 report of the Regional Economic Outlook (REO) for Sub-Saharan Africa (SSA).
Randall stressed that prudent fiscal policy is needed to rein in public debt, while monetary policy must be geared towards ensuring low inflation, adding that countries should also strengthen revenue mobilisation and continue to advance structural reforms to reduce market distortions, shaping an environment that fosters private investment.
“Domestic revenue mobilisation is one of the most pressing policy challenges facing sub-Saharan African countries, while the reasons may vary according to country-specific circumstances. Private investment in sub-Saharan Africa is low compared with other countries with similar levels of economic development. The low level of private investment is constraining the region’s efforts to improve social outcomes by holding back labor productivity and the resulting gains in real wages and households’ income.” she stated.
She explained into regional trends that SSA enjoyed a sustained period of rising income for nearly two decades; real GDP per capita growth in the SSA region stalled in 2015.
However, she said, growth is now rebounding but remains uneven and the outlook is subdued.
“Concrete policy actions are needed for a sustained and more robust recovery over the medium term; Fiscal adjustment should be designed to minimise any adverse impact on growth; the tax gap is sizable and should be closed; boosting private investment can lead to more durable growth; and further trade integration would also help increase medium-term growth.”