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IMF / AFRICA ECONOMIC OUTLOOK
STORY: IMF / AFRICA ECONOMIC OUTLOOK
TRT: 3.08
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 22 OCTOBER, 2010, WASHINGTON, DC
FILE / RECENT, WASHINGTON, DC
1. Wide shot, exterior IMF HQ
22 OCTOBER, 2010, WASHINGTON, DC
2. Set-up shot, Antoinette Sayeh
3. SOUNDBITE (English) Antoinette Sayeh, Director, Africa Department, IMF:
“We’re very encouraged. The outlook is actually quite encouraging for the region. Sub-Saharan Africa did much better through the crisis than most observers expected. Of course, we now think that with that performance Sub-Saharan Africa could see itself near where it was in the beginning of the decade, growing by some five to five-and-a-half percent this year and next.”
FILE / RECENT, NAIROBI, KENYA
4. Various shots, city street
22 OCTOBER, 2010, WASHINGTON, DC
5. SOUNDBITE (English) Antoinette Sayeh, Director, Africa Department, IMF:
“Now that the growth seems to be in hand and returning, the recovery is returning, it’s important that the authorities now work to rebuild those savings that they used in the course of the crisis so that when the next crisis hits they’re able again to draw on their reserves and their savings to respond. So that’s really the challenge ahead to continue good macroeconomic policies to rebuild, as we call them, the policy buffers that have helped so much during this crisis.”
FILE / RECENT / JOHANNESBURG, SOUTH AFRICA
6. Various shots, highway construction
22 OCTOBER, 2010, WASHINGTON, DC
7. SOUNDBITE (English) Antoinette Sayeh, Director, Africa Department, IMF:
“Sub-Saharan Africa needs investment. A large part of that investment in the social sectors and some infrastructure investments will depend on the public sector. But most investments should come from the private sector. And so the challenge going forward will be for Sub-Saharan African governments to improve the enabling environment for private investments so that they continue to attract capital from abroad and so that investments in infrastructure in other manufacturing and other facilities help to sustain growth.”
FILE / RECENT, NAIROBI, KENYA
8. Various shots, vendors in a marketplace
22 OCTOBER, 2010, WASHINGTON, DC
9. SOUNDBITE (English) Antoinette Sayeh, Director, Africa Department, IMF:
“There is still work to be done on the overall enabling environment and regulatory policies and how long it takes to register businesses, how easy it is to import. Despite the fact that there’s been tremendous progress in these areas it still takes too long to establish new business in many countries and there’s still significant work to be done to make sure that the private sector is able to make the long term investments and commitment that are needed to sustain growth.”
FILE / RECENT, WASHINGTON, DC
10. Wide shot, exterior IMF
Sub-Saharan Africa's accelerating economic growth is expected to be broad based in 2010 and 2011, the IMF said in its latest regional forecast. Strong domestic demand and resurgent exports are projected to boost average growth rates in the region to 5–5 ½ percent, near to the high levels recorded before the global economic slowdown.
“We’re very encouraged. The outlook is actually quite encouraging for the region. Sub-Saharan Africa did much better through the crisis than most observers expected. Of course, we now think that with that performance Sub-Saharan Africa could see itself near where it was in the beginning of the decade, growing by some five to five-and-a-half percent this year and next,” said Antoinette Sayeh, the Director of the IMF’s Africa Department.
The key explanation for the resilience of sub-Saharan Africa has been the generally strong economic position of countries going into the global financial crisis. This allowed counter-cyclical fiscal and monetary policies to be put in place to soften the impact of the global downturn.
Nevertheless, the IMF’s Regional Economic Outlook for sub-Saharan Africa notes that the global crisis has left a legacy of elevated unemployment levels in countries with more developed manufacturing sectors and, more generally, of weakened fiscal balances. Credit growth also remains subdued.
In most countries, growth rates have returned close to potential and domestic demand is expected to remain strong on the basis of rising real incomes and sustained private and public investment. However, the trajectory of fiscal balances in some countries is not consistent with medium-term financial and debt sustainability. The Regional Economic Outlook suggests therefore that now is an opportune time in some cases to adjust medium-term spending and revenue plans and to start withdrawing any recent fiscal stimulus measures.
“Now that the growth seems to be in hand and returning, the recovery is returning, it’s important that the authorities now work to rebuild those savings that they used in the course of the crisis so that when the next crisis hits they’re able again to draw on their reserves and their savings to respond. So that’s really the challenge ahead to continue good macroeconomic policies to rebuild, as we call them, the policy buffers that have helped so much during this crisis,” Sayeh said.
Continued fiscal support is likely needed only in a handful of countries with below-potential growth and no debt sustainability risk.
As long as inflation and credit growth stay low, there is little urgency to reverse interest rate cuts.
Over the long term, the report advocates that improving public services and infrastructure, strengthening financial systems, and maintaining an open business climate should remain paramount policy objectives.
“Sub-Saharan Africa needs investment. A large part of that investment in the social sectors and some infrastructure investments will depend on the public sector. But most investments should come from the private sector. And so the challenge going forward will be for Sub-Saharan African governments to improve the enabling environment for private investments so that they continue to attract capital from abroad and so that investments in infrastructure in other manufacturing and other facilities help to sustain growth,” Sayeh said.
The Regional Economic Outlook draws attention to the downside risks that remain for the global economy, with only a shaky recovery so far evident in advanced countries and continued fragility in financial markets.
With the expansion in global output set to continue, IMF country teams are projecting that, barring shocks, most countries will maintain strong growth into 2011. Fiscal balances are also expected to improve somewhat in 2011 relative to 2010.
“There is still work to be done on the overall enabling environment and regulatory policies and how long it takes to register businesses, how easy it is to import. Despite the fact that there’s been tremendous progress in these areas it still takes too long to establish new business in many countries and there’s still significant work to be done to make sure that the private sector is able to make the long term investments and commitment that are needed to sustain growth,” said Sayeh.
Sub-Saharan Africa’s growth performance will hinge in part on official and private financing flows staying at their recent elevated levels. If extended risk aversion or fiscal retrenchment in Europe was to lead to a sharp drop off in donor support, this would almost certainly hamper the envisaged acceleration in GDP growth.
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