African countries face challenges in tackling major problems of reducing debt

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After two decades of economic stagnation and little progress in poverty reduction, the seeds of an economic renaissance in sub-Saharan Africa, with faster growth and less poverty, have been sown in recent years through innovative measures such as the IMF's Poverty Reduction and Growth Facility (PRGF) and the joint IMF-World Bank Heavily Indebted Poor Countries (HIPC) Initiative.A recently released IMF Issues Brief outlines the key policy issues that countries in the region will need to address and the contribution that the international community, including the IMF, will need to make to build on recent gains and establish a cycle of sustained high-quality growth. This and other Issues Briefs are available on the IMF's website (www.imf.org).

In reviewing the economic record, the Issues Brief observes that, following disappointing economic performance in the 1980s and the early 1990s, sub-Saharan Africa's performance improved in1995-97 and real per capita incomes began to rise. This improvement reflected primarily a new commitment by many countries to sound macroeconomic policies and more open and better managed economies, to address their daunting economic and social challenges and to improve their terms of trade.

Despite the recent progress, the Issues Brief cautions, growth remains fragile, standards of living are still very low, and poverty is widespread.Health and education indicators continue to be poor and job opportunities have often not kept pace with the growth of the labor force. The region has been unable to share fully in the benefits of globalization. In most countries, inadequate infrastructure, weak tax administration and poor enforcement, lack of transparency in tax and investment policies, poor communications, undeveloped financial services, and weak judiciaries have all militated against fuller engagement in the international economy.

Armed conflicts also frequently damage economic prospects. The spread of HIV/AIDS is reducing labor productivity and human welfare dramatically.

The Issues Brief points out that faster sustainable growth is essential for improving living standards and reducing poverty: given the low level of per capita income in the region...