– By THE AFRICA BAZAAR Staff Writer
Africa’s achievements are remarkable, and the overall outlook for the continent is optimistic, International Monetary Fund Managing Director Christine Lagarde said Thursday at a joint IMF-Mozambique Africa Rising conference in Maputo, Mozambique.
“Now that Africa has taken its destiny into its own hands, it is the time to build the future,” Lagarde added.
The two-day conference, which brings together domestic and international participants, including finance ministers and central bank governors from the continent and development partners from countries such as Australia, Brazil and China, the private sector and civil society, reinforced IMF’s continuing support of working together with African countries and governments by providing both financial support and policy advice that will help the continent build upon the strong economic gains it has made since the 2008 global economic crisis.
The IMF’s latest Regional Economic Outlook for Sub-Saharan Africa from April projected economic growth in Sub-Saharan Africa to pick up to about 5.4 percent this year and 5.5 percent in 2015 from 4.9 percent in 2013. Excluding South Africa, growth is expected to reach 6.5 percent in 2014 and 2015. This acceleration reflects improved prospects in a large number of countries in the region, including most oil exporters and several low-income countries and fragile states. Economic activity in the region continues to be underpinned by large investments in infrastructure and mining, and maturing investments. However, the report warns that African countries need to adjust to slower growth in emerging market countries that have helped boost regional growth in recent years, and tighter global credit conditions.
“This conference offers a unique opportunity to reflect—together—on the lessons learned from Africa’s success and the challenges ahead. There is still much to be done,” said Lagarde. “The continent is very diverse, and some countries risk being left behind, especially those faced with recurring conflict. In others, the rapid growth is yet to be widely shared across the population, with many Africans failing to see the fruits of economic success.”
In discussing the lessons learned and the challenges facing the continent as it builds upon its recent economic gains, the IMF’s managing director shared her perspectives on Africa’s success and the challenges ahead.
She lauded Africa’s achievements, highlighting the economic stability and reforms steps taken by many sub-Saharan countries like Mozambique, Kenya, Uganda, and Botswana that have helped catapulted them to emerging economies.
On the short-term and the longer-term challenges ahead for the continent, Lagarde urged the governments and policy makers to boost human capital and technological innovation to foster economic and social growths on the continent. She added that they should “keep a firm eye on what’s going on beyond its horizons” by managing their economies and trade relationships with major trading partners and limiting potential market volatility risks to external conditions as the global economy turns the corner of the Great Recession.
“Policymakers will no doubt have their hands full. But they know what to do. The IMF stands ready to help with its policy advice, its technical assistance, and if needed, financial support,” she said.
Lagarde said as African countries continue to take steps to build their futures, leaders must also invest in building the continent’s infrastructure, build institutions, which means developing good governance, transparency, and sound economic systems across the continent; and building people by investing in human capital.
“We all know that Africa has tremendous potential—it is home to more than 30 percent of the world’s mineral reserves. Properly managed, these endowments offer unparalleled opportunity for economic growth and development. Moreover, these resources can be instrumental in relieving the large constraints in infrastructure that I just talked about,” said Lagarde. “Yet—and let me be frank—in too many countries, the rents from extractive industries are captured by just a few. What can be done? Strengthening the institutional and governance frameworks that manage these resources is a good place to start. Transparency can help increase accountability—and help ensure that these resources are harnessed for the benefit of all.”
She concluded her speech reiterating the IMF’s commitment to the continent and the excitement for the future of the continent, saying while the challenges ahead for Africa are significant, nevertheless, the opportunities are vast and, those challenges can be overcome—through sustained strong policies, both economic and social.
“Now is the time to go further—to work together towards an inclusive, job-rich, and sustainable growth strategy. Now is the time to extend the gains that many countries have enjoyed to those that have been left behind—by helping them overcome fragility and build strong institutions,” said Lagarde.