The International Monetary Fund warned on Tuesday that growth in sub-Saharan Africa was likely to slow to its lowest point in more than 20 years, with average growth forecast at just 1.5 percent this year because of lower commodity prices and an unfriendly global economic environment.
Countries without significant natural resources such as Ethiopia, Ivory Coast, Kenya and Senegal were performing better as they stood to benefit from lower oil import prices and infrastructure reforms, the Washington-based lender said in its report. Commodity exporters such as Angola, Nigeria and South Africa, on the other hand, were hurt by the slump in oil prices.
"The external environment facing many of the region's countries has deteriorated," said Abebe Aemro Selassie, director of the IMF's African Department. "In addition, the policy response in many of the countries most affected by the shocks has been delayed and inadequate."
The IMF said fiscal, structural and social reforms were needed to help these countries withstand the slowdown. The fund called for flexible exchange rates to help absorb external pressures, for tighter monetary policy in order to curb inflation, and for a reduction of government debt. The IMF warned that delayed exchange rate adjustment was deterring investment and preventing growth.
"A comprehensive ... effort is necessary: strong fiscal adjustment, enhanced social protection policies and structural reforms to facilitate competitiveness and diversification,'' Selassie said.
Global economic growth has been sluggish because of low commodity prices and a backlash against international trade.