NAIROBI (Xinhua) --
Monetary Fund (IMF) has called for prudent economic policies to
help boost growth in Sub-Saharan Africa.
In its October 2015 Regional Economic Outlook for Sub-Saharan
Africa received on Thursday, the lender said economic activity
in the region has weakened markedly although growth remains
stronger than in many other regions, with growth expected at
3.75 per cent in 2015 and 4.25 per cent in 2016.
Antoinette Sayeh, Director of the IMF’s African Department,
said this overall difficult picture masks considerable variation
across the region.
"In most low-income countries, growth is holding up,
supported by ongoing infrastructure investment and solid private
"But even within this group, some countries are feeling the
pinch from lower prices for their main commodity exports, even
as lower oil prices ease their energy import bill," Sayeh said.
"Even more hard hit are the region’s oil exporters, including
Nigeria and Angola, as falling export incomes and resulting
sharp fiscal adjustments are taking a toll on activity," she
In the Outlook for Sub-Saharan Africa, titled Dealing with
the Gathering Clouds, the IMF attributed the slowdown to the
combination of the sharp fall of commodity prices and more
difficult financing conditions.
Sayeh said several middle-income countries, such as Ghana,
South Africa, and Zambia, are also facing unfavorable
conditions, including weak commodity prices, difficult financing
conditions, and electricity shortages.
Moreover, a number of countries in the region are facing
these circumstances with more limited external and fiscal
buffers than they did at the time of the global financial
crisis, the IMF official said.
She added that policies need to adjust to this new
environment, adding that the sharp and seemingly enduring
decline in oil prices makes adjustment unavoidable, and while
some had space to draw on buffers or borrow to smooth the
adjustment, that space is becoming increasingly limited.
"For most other countries, fiscal policy needs to strike an
appropriate balance between debt sustainability considerations,
on the one hand, and addressing development needs, on the
other," Sayeh said.
Sayeh said it will also be essential to build on recent
progress and continue to strengthen domestic revenue
mobilization as much-needed additional resources to finance
investments in the region’s future.
"Reducing inequalities, through carefully designed fiscal and
financial sector policies and the removal of gender-based legal
restrictions, could deliver significant growth dividends," she
On the monetary front, the IMF noted that wherever the
terms-of-trade declines have been significant and the exchange
rate is not pegged, it is important to allow exchange rate
depreciation to absorb the shock.
"Even in those countries that are not heavily reliant on
commodity exports and have seen their currency come under
pressure, resisting them risks losing scarce reserves," the
According to IMF, countries such as Cote d’Ivoire, Ethiopia,
and Tanzania are expected to grow at 7 percent or more this year
Other low-income countries, however are feeling the pinch
from commodity prices, even though cheaper oil has eased their
energy import bill.
Hardest hit are the region’s oil exporters as falling oil
prices have drastically reduced export revenue and forced a
sharp fiscal adjustment.
The oil producers account for about half of the region’s GDP
and include the largest producers, Nigeria and Angola.
Several middle-income countries, including Ghana, South
Africa, and Zambia, are also facing unfavorable conditions,
ranging from weak commodity prices to difficult financing
conditions and electricity shortages.
Accordingly, interventions should be limited to responding to
disorderly movements of the exchange rate, the IMF said.
Monetary policy should only respond to second-round effects,
if any, of exchange rate pass-through and other upward shocks to
inflation, and risks to the financial sector from commodity
price declines and exchange rate depreciation will need to be
"In this environment, efforts to diversify growth away from
extractive industries take on renewed importance.
"The rapid growth of the last decade has masked deteriorating
trends in competitiveness, especially among commodity
exporters," Sayeh said.
"To nurture new sources of growth and create sufficient jobs
for the region’s growing population of young people, policy
actions need to be geared toward boosting competitiveness, via
progress on the business environment, infrastructure, and
UN official ask Africa to change policy, curriculum to end
NAIROBI (Xinhua) --
The UN has called on African governments
to act urgently to change how business and wealth can be created
in the agricultural value chain.
Richard Munang, Coordinator for Africa Regional Climate
Change Program, said that the continent needs to revolutionarily
overhaul agricultural policy and incorporate youths in the
sector to be able to manage farming as a business as opposed to
a social venture.
"The 65 percent of arable land is capable of improving food
security as well as creating employment for the 60 percent
unemployed youths once the policies are changed to suit youth’s
involvement in agriculture," Munang told a forum in Nairobi.
In Africa, most country’s constitution do not allow youths
and women access to title deeds hence denying them an
opportunity to seek financial services from banking
He noted that the continent also need to strengthen knowledge
management, through capacity building, reinforce economic
incentives and also engage private sector in agriculture to help
Munnag told universities to change their curriculum and
include vocational training to promote agricultural practice
amongst college leavers.
He noted that 17 million youths can be employed yearly in the
agricultural sector once proper marketing and lending
institutions are engaged.
"The business opportunities presented by the changing climate
especially to Africa could be enormous," Munang added.
He observed that urgent steps need to be taken to tap into
this hidden fortune especially in the agricultural sector which
employs more than 60 percent of the labor force in the continent
with contribution of up to about 32 percent of the Gross
Domestic Product (GDP).
The Director of Institute of Development Studies at the
University of Nairobi (UoN) Professor Winnie Mitulla called for
a partnership between academia and private sector in
disseminating research to the public.
"The current food insecurity requires that partnerships are
promoted as way of reducing hunger and malnutrition in the
continent," she added.
Participants at the meeting called for creation of linkages
to enable farmers sell their produce easily within the continent
as opposed to exports when the continent needs additional food.
They further observed that air transport within the continent
need to be liberalized and abandon usage of visas to help
promote intra-Africa trade.
Rwanda drops seven places in World Bank’s "Doing Business"
KIGALI Rwanda (Xinhua) --
The World Bank’s "Doing Business"
report for 2016, released on Tuesday ranked Rwanda 62nd out of
189 countries in the world, making it seven places down compared
to last year’s 55th position.
The country is still ranked among the best economies in the
world in getting credit at the 2nd position globally and
registering property at 12th.
According to the report, Rwanda has been ranked the second
easiest place to do business in Africa after Mauritius.
The economic giant on the continent, South Africa, comes
Rwanda is the top business friendly destination in East
Africa, and the 7th top reformer globally according to the World
It leads all the East African countries followed by Kenya in
ease of doing business.
Launched in 2002, Doing Business report looks at domestic
small and medium size companies and measures the regulations
applying to them through their life cycle.
According to Claire Akamanzi, chief operating officer Rwanda
Development Board, Rwanda implemented a credit scoring service,
supporting banks and financial institutions to assess
creditworthiness which he said made the country one of the best
economies in the world in getting credit.
The small central African nation has demonstrated consistent
strong performance in the World Bank Doing Business Rankings in
A new investment law, launched in July, seeks to bring
foreign direct investments (FDIs) worth 1.12 billion U.S dollars
by the end of the year.
Figures from Rwanda Development Board (RDB) put the country’s
actual FDIs at 257 million U.S dollars in 2013 and 521 million
U.S dollars in 2014.