Africa Seeing Signs of Recovery After Global Crisis-IMF

• Author: Simon Willson
• Position: IMF Survey online

In a speech in Nairobi, Kenya, Strauss-Kahn assessed the impact of the global economic and financial crisis on Africa. While noting that the turbulence had struck Africa through many different channels, he said that "all across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity."

The IMF now expects growth of around 4½ percent in 2010. "In short, I think that Africa is back-although a lot depends on a global recovery that is in its early stages."

The IMF chief is on a trip to Kenya, South Africa, and Zambia to meet political, business, and civil society leaders and assess the impact of the global economic and financial crisis on Africa.

"The twin challenges for Africa are to revive strong growth and reinforce resilience to shocks," he stated in the speech on March 8 that set the scene for a panel discussion involving Kenya’s Prime Minister Raila Odinga, Finance Minister Uhuru Kenyatta, environmental activist and Nobel Prize winner Wangari Maathai, rock star and political activist Bob Geldof, and Transparency International’s Akere Muna.

The televised panel discussion took place in the University of Nairobi’s auditorium, where an audience of around 500 students, community leaders, and officials found standing room only. Moderator Charlayne Hunter-Gault put questions to the panelists that covered poverty relief, good governance, regional integration, intra-African trade, climate change financing, and the use of Africa’s natural resources. In the last half hour of the two-hour event, Hunter-Gault invited questions from students in the audience.

Improved policies

Strauss-Kahn said that because many African countries had undertaken good policies before the global economic crisis, this had helped to inoculate them against a more severe downturn-strengthening budget positions, reducing debt burdens, holding down inflation, and building comfortable reserve cushions. He noted that because debt positions had improved dramatically, many countries had been able to use the budget to counteract the crisis, including preserving social spending.

At the same time, Strauss-Kahn emphasized that there was no room for complacency regarding Africa’s economic outlook. "This is not the time to rest on our laurels," he said. "Africa remains highly vulnerable to economic dislocation...