IMF: If Africa will grow in 2017, Nigeria must act fast

The International Monetary Fund (IMF) says for sub-Saharan Africa to record its required growth in 2017, the oil exporters most short-changed by falling crude prices, such as Nigeria and Angola, must act fast.

Speaking on IMF regional outlook for sub-Saharan Africa, Abebe Selassie, director of the IMF’s African department, disclosed that economic growth in sub-Saharan Africa in 2016 is set to slow to its lowest level in more than 20 years.

“The slowdown reflects two broad factors; the external environment facing many of the region’s countries has deteriorated, notably with commodity prices at multi-year lows and financing conditions markedly tighter,” he said.

“In addition, the policy response in many of the countries most affected by these shocks has been delayed and inadequate, raising uncertainty, deterring private investment and stifling new sources of growth.”

He said Africa must give in to pessimism as “the fuller picture is one of multi-speed growth, with the aggregate growth number masking considerable diversity across the region”.

He said most non-commodity exporting countries—representing close to half of the countries in the region—continue to perform well, with countries such as Côte d’Ivoire, Ethiopia, Senegal, and Tanzania foreseen to continue to grow at more than six percent.

Selassie noted that a modest pick-up in economic activity is likely, provided strong policy action is taken.

“Subject to reforms being initiated quickly in the coming months, growth would recover close to 3 percent in 2017. But to make this happen, the hardest-hit countries, especially oil exporters, need to act promptly,” he added.

“Given the scale and persistent nature of the shock, and as existing buffers have been exhausted, a comprehensive three-pronged adjustment effort is needed urgently: Strong fiscal adjustment, enhanced social protection policies, and structural reforms to facilitate competitiveness and diversification.

“Further delays in addressing the elevated macroeconomic imbalances are certain to undermine growth prospects further and delay a robust and job-rich recovery.”