African economies will recover and record significant growth in 2024 despite several countries experiencing increased political instability and deteriorating security, Managing Director , International Monetary Fund (IMF), Kristalina Georgieva, has said.
Speaking at the African caucus meeting held yesterday in US, she said: “We had very productive discussions on Africa’s economic prospects. This year has been a difficult year for Africa. The region is still emerging from the COVID-19 pandemic and African countries have been hit by high borrowing costs and a cost-of-living crisis.”
Georgieva explained that against this backdrop, the IMF agreed that policy priorities to address these challenges should aim at solidifying the ongoing economic recovery, rebuilding buffers, and investing in the future to improve living standards. In countries with elevated and rising inflation, policy settings should be sufficiently tight to bring it down.
She said that the exchange rate, where appropriate, should be allowed to play its shock absorber role while mitigating second-round effects of depreciation.
“Fiscal policy should continue consolidating public finances and reducing debt sustainability risks while providing targeted social assistance to the most vulnerable. In resource intensive countries, investing in education, managing better resource-based wealth, accelerating diversification will help improve living standards,” she said.
The IMF also underscored the need to scale up concessional financing, including to support climate change adaptation and mitigation.
“Large financing needs from infrastructure and social protection gaps are being exacerbated by climate change. While the African continent had a minor contribution to the stocks of greenhouse gases in the atmosphere, it is already bearing and is deemed to bear the largest costs from climate change. At the same time, fiscal space remains constrained as buffers have been depleted during the crisis. Private sector participation will also be essential to fill the funding gaps,” she said.