A slow global economy, declining commodity prices and tighter credit markets are seriously threatening Africa’s economies, the International Monetary Fund (IMF) warns.
In a report, Impact of the Global Financial Crisis on Sub-Saharan Africa, the IMF says that economic growth in sub-Saharan Africa is expected to slow to 3.25% in 2009 from 5% in 2008. The new forecast is half of the rate expected a year ago.
Antoinette Sayeh, the African department director at the IMF, says that the gains of the past decade are at risk. Many countries in sub-Saharan Africa then saw sustained high rates of economic growth and rising income levels.
The IMF has increased its financial support to African countries under its new Exogenous Shocks Facility. This provides policy support and financial assistance to low-income countries that face significant negative economic hits which are beyond their governments’ control. It is also stepping up its technical assistance.
Sayeh says that African policymakers must balance two competing priorities: supporting domestic activity and maintaining macroeconomic stability.