The IMF’s latest regional economic outlook for Sub-Saharan Africa shows growth at its lowest level in more than 20 years. In this podcast, the African Department’s new Director, Abebe Aemro Selassie, says it’s a mixed story of struggling oil-exporters and strong performers.
The report shows the region is going through a difficult period, but Selassie is optimistic.
“Looking ahead, and if countries pursue the right policies, I do see a bright future for the region,” says Selassie, and describes a “multispeed Africa, with multispeed growth.”
The three largest countries in the region—Angola, Nigeria and South Africa—face acute economic imbalances, Selassie says, because governments have not taken steps to cope with the drop in export earnings due to low commodity prices—notably oil.
While the hardest hit countries are a drag on the region’s overall growth, Selassie says countries like Cote d’Ivoire, Senegal, and Tanzania continue to grow at 6 percent or more.
The most important way to cope with the tough times inside and outside their borders is for countries to get their economic house in order. For everyone, that means decisions on reallocating spending, changing tax systems, and eliminating fuel subsidies, while not increasing the burden on the poor and vulnerable groups. It also means mobilizing government revenues to help reduce deficits.
Selassie highlights the need for investment in infrastructure and in the development of people, through education and health care. He sees huge potential for technology, including financial, to help the big parts of the region that remain underbanked. Technology allows money transfers to be cheaper and more secure, and can enhance productivity.
Listen to the whole interview with Abebe Selassie:
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