IWF NEWS: Sub-Saharan Africa: Boom cutting poverty

[Matthias Offodile]

Sub-Saharan Africa: Boom cutting poverty

October 18, 2007

Sub-Saharan Africa was enjoying its strongest economic momentum in more than four decades, with some countries at last recording "substantial progress" in reducing poverty, the International Monetary Fund (IMF) said yesterday.

In its biannual survey of the world economy, the IMF found that while African oil exporters were growing the fastest, "most other countries are also growing strongly and outperforming historic trends".

It said sub-Saharan Africa "is clearly enjoying its best period of sustained growth since independence" in the early 1960s, and "faster-growing countries in the region are making substantial progress in reducing poverty rates".

But the report warned that the robust pace could slow if the global economy were to contract sharply, cutting demand for African commodity exports and imposing financial constraints.

After growth of 5.7 percent last year, the IMF said the economies of sub-Saharan Africa should expand at a rate of 6.1 percent this year and 6.8 percent next year - 40 basis points faster than it had foreseen in a projection in July.


The report attributed the region's "growth success" to a generally healthy global economy, sound domestic policies and increased "openness" to the world on the part of many countries, which had now begun to attract more private investment capital.

It noted that African nations had managed to diversify their export markets, finding new outlets in Asia, for example.

But the IMF also urged sub-Saharan governments to carry on with reforms to improve their administration, develop infrastructure and strengthen the business environment.

The report finally said many countries should implement more flexible exchange rate regimes and make greater use of monetary policy.