Faster Growth Shows Recovery Under Way in Africa

Africa’s growth projected near levels seen before global slowdown

Faster emerging markets growth is chance to diversify trade, investment

Fiscal policies need to be tempered to restore sustainable public finances

Sayeh told a news conference in Washington the IMF expects Africa’s growth to reach close to 5 percent in 2010 and strengthen further in 2011, thereby coming fairly close to regaining levels seen before the global slowdown.

Speaking to reporters October 6 ahead of the 2010 IMF-World Bank Annual Meetings in Washington, Sayeh cautioned, however, that there are risks to this outlook. Large global imbalances need to be addressed, such as those between surplus and deficit countries on the one hand, and between public and private sector-led growth on the other.

In some parts of the world, notably emerging Asia and Latin America, the recovery is mature and self sustaining, Sayeh noted. But in other regions, the recovery remains fragile and dependent on policy support.

Opportunity to diversify

For sub-Saharan Africa, the faster growth of emerging market countries presents an opportunity to diversify trade and investment flows—which is already happening at an increasing pace, Sayeh said. “But seizing this opportunity requires strengthening African economic competitiveness, notably by improving public infrastructure.”

Taking advantage of faster emerging market growth also requires bringing economic policies back on an even keel by rebuilding the policy buffers that served so well during the crisis, Sayeh said. In particular, expansionary fiscal policies will need to be tempered to make sure that public finances return to a sustainable path and public debt levels remain manageable.

Most of sub-Saharan Africa weathered the global economic crisis quite well, Sayeh said. Some countries, middle income countries and oil producers in particular, were harder hit. But most low-income countries showed a welcome resilience to the turmoil affecting much of the rest of the world.

Buoyant commodity markets

Several factors account for this significant resilience...