Africa's Reforms Payoff Held Up by Global Uncertainty

  • Investment flows yet to follow reforms to boost business friendliness
  • Better infrastructure key to boosting trade between African countries
  • Ministers note greater flexibility of Bretton Woods lending institutions
  • Speaking to reporters during the IMF–World Bank Annual Meetings in Tokyo, the ministers said the fact that Africa has maintained annual average growth of around 5 percent during difficult times for the world economy gave reason for confidence.

    “The main concern, as has been stated in these Annual Meetings, is that we still have these uncertainties: we don’t know what is happening next year in the world economy,” Rwandan Finance Minister John Rwangombwa said.

    Rwangombwa noted that Rwanda had enacted several reforms with the aim of attracting foreign investors. The country had dismantled obstacles to private investment, and in the last four years it had moved up in the “doing business” rankings by creating an environment for investment—both domestic and international.

    Hampered vision

    “These challenges in the world economy hinder us from seeing the benefits we should be getting from creating an enabling environment back home,” Rwangombwa stated. “To maintain our growth rates we need to transform our economy from a predominantly agrarian to a service-based economy, and we need investors from abroad to be able to achieve this vision we have and, if these uncertainties are not dealt with immediately, that is going to hamper our vision going forward.

    “Even when we have achieved maturity in terms of managing our economies, we are still reliant on the global economy in terms of investment and markets for exports,” Rwangombwa said.

    Economy Minister Kerfalla Yansane said Guinea needs appreciable extra resources to deal with social needs because more than half of the population is below the poverty line. “But we do not yet see substantial investment coming in to help us to meet the expectations of the population, and I think this is due somewhat to the international climate.”

    Namibian Finance Minister Saara Kuugongelwa-Amadhila noted that prospects for a quick resolution of global economic and financial distress and for the resumption of strong growth in global trade were uncertain. “The protracted uncertainty in the outlook for the global economy, and especially the eurozone crisis, elevates the challenges going forward,” Kuugongelwa-Amadhila said.

    “These uncertainties will definitely affect economic activity and prospects in a...

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