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Right Time for Africa

Ignacio Hernandez's picture

FD

 

The December issue of Finance and Development is dedicated to Africa.

 

'Africa: Making Its Move' explores some of the obstacles facing sub-Saharan Africa as it attempts to capitalize on changes that offer fresh opportunities for growth and poverty reduction.

 

In its lead article, Right Time for Africa, Abdoulaye Bio-Tchané and Benedicte Vibe Christensen, Director and a Deputy Director of the IMF's African Department respectively, present a somewhat optimistic view of the continent. "Africa needs to build on its recent success to catch up".

 

Yet things seem to be changing for the better throughout the subcontinent. In most African countries, leaders are now selected through democratic elections. The decision-making process is becoming more participatory and involving greater segments of civil society. The number of countries in crisis has declined, although conflict persists in some countries and regions. The pursuit of strong macroeconomic policies and economic reforms is bearing fruit: economies are growing faster and more steadily than before, and inflation is falling. Record levels of reserves in both oil-producing and oil-importing countries act as a cushion against external shocks, such as the recent increase in oil prices. Countries pursuing economic reforms have benefited from unprecedented amounts of debt relief from a wide variety of sources. In addition, the international community has promised a significant scaling up of aid resources in the years to come, offering African countries a fresh chance to free up resources and invest in human and fixed capital to promote sustainable growth. These changes have not gone unnoticed abroad. Foreign investors are showing increasing interest in the African continent, both in the domestic debt markets and in direct investment in the extraction of natural resources.

 

Although not exempt of challenges

 

The challenge for African policymakers now is to carry this vision forward. While economic growth has accelerated in many countries, it still needs to translate into greater improvement in the living standards of the broader population. Governments face a dilemma. With unprecedented amounts of debt relief from multilateral and bilateral donors and promises of a scaling up of aid from the international community, which have yet to materialize, the populations hold great expectations for better education and health services, as well as for improvements in infrastructure such as roads, ports, and energy. At the same time, governments have to make sure that increased spending is consistent with absorptive capacity and with maintaining the progress in macroeconomic stability and low inflation, and they must avoid a repetition of past mistakes of misallocation of budgetary resources. This requires a tightrope balancing act.


Africa

Comments

Submitted by Hammad on
Seriously there is lot of saying that lot of people die in africa due to poverty..I think the political leaders of African are responsible for the current suitation in africa. The resource utilization and their improper consumtion are the main key fators.

Submitted by Felato on
Good work

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