Maputo - Africa was “taking off” with strong, steady growth but poverty was unacceptably high so governments needed to build infrastructure and institutions and educate people to share the benefits more widely, the head of the International Monetary Fund (IMF) said yesterday.
Sub-Saharan Africa’s economy was expected to grow by around 5.5 percent this year – well above the global average – with some of its poorest countries expanding by closer to 7 percent, managing director Christine Lagarde told an IMF conference, entitled Africa Rising, in Maputo.
But although it had become a growing investment destination, with a record $80 billion (R838bn) of inflows expected this year, the economic benefits had yet to be widely distributed.
“Poverty remains stuck at unacceptably high levels – still afflicting about 45 percent of the region’s households,” Lagarde told the meeting of African finance ministers and development experts.
Despite forecasts of the strong expansion continuing, flare-ups of conflict, insurgency and violence darkened the positive outlook. She cited civil war in South Sudan, the Boko Haram insurgency in Nigeria and attacks by Islamist militants in Kenya.
As countries tap new funds from discoveries of natural resource deposits and international dollar bond issues, questions have arisen about how governments are managing this money in fast-growing economies like Ghana and Zambia.
With the international recovery still looking uneven, Lagarde said Africa’s positive outlook faced risks from slower growth in its main trade partners in advanced economies and large emerging markets.
Other risks included lower prices for some commodities, tighter external financial conditions and market volatility.
The IMF head recommended three priorities to ensure the growth could be wide, inclusive and sustained: “Build infrastructure, build institutions, and build people.”
She said Africa still had big infrastructure gaps and had to improve governance and transparency and create sound economic frameworks. - Reuters