Emeka Okoroanyanwu
Ahead of the IMF/World Bank 2023 Annual General Meetings taking place in Marrakech, Morocco, from October 9 to 15, 2023, Managing Director of the International Monetary Fund (IMF), Ms Kristalina Georgieva has said that the world requires a prosperous African economy in the 21st century to achieve accelerated growth.
She said though advanced economies were rapidly aging, they had abundant capital for investments noting that the key would be to better connect that capital to Africa’s abundant human resources, so as to inject more dynamism into the current anaemic global growth outlook.
Georgieva who spoke in Cote d’Ivoire during the 2023 Annual General Meetings Curtain Raiser speech on the Outlook for the Global Economy and Policy Priorities said Africa also makes the strongest case for building economic resilience.
She lamented that the shock and impact of the COVID-19 pandemic, Russia’s war in Ukraine, climate disasters, the cost-of-living crisis, political instability, are more visible in Africa than the rest of the world.
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“A prosperous Africa requires maintaining the most important bridge of all, the bridge that connects all countries, that of international cooperation. During the meetings, we will make coming together meaningful for the people in our member countries,” she said.
Speaking on the global economic outlook, the IMF boss said world economy was resilient, but challenged by weak growth and deepening divergence, noting that this was largely because of stronger-than-expected demand for services and tangible progress in the fight against inflation. According to her, while the recovery from the shocks of the past few years continues, it is slow and uneven, adding that the current pace of global growth remains quite weak, well below the 3.8 per cent average in the two decades before the Covid-19 pandemic.
“Looking ahead over the medium term, growth prospects have weakened further,” the IMF boss said, identifying three policy priorities countries should consider for stronger future economic growth.
She said the first priority was to reinforce economic and financial stability by fighting inflation, noting that winning the fight against inflation requires interest rates to remain higher for longer period.
“It is paramount to avoid a premature easing of policy, given the risk of resurging inflation,” she said.
Georgieva noted that some countries in Africa were reforming their energy subsidies to create space for development spending.
She specifically mentioned Nigeria that has just removed subsidy on premium motor spirit that cost about $10 billion last year, four times the amount spent on health.
She said many countries also need to generate higher and more reliable domestic revenue,” disclosing also that the second policy priority was to lay the foundations for inclusive, sustainable growth through transformational reforms and building strong state institutions.
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“History teaches us that poor countries become richer by educating people, putting in place good infrastructure, and ensuring effective governance with respect for the rule of law.
“First and foremost is the need to invest in people. For Africa, this means expanding high-quality education at all levels, so that young people can seize the job opportunities of tomorrow. It also means scaling up investment in healthcare,” she said
The IMF boss said the third policy priority was to boost collective resilience through international cooperation, adding that cooperation is weakening at a time the world needs it most, saying that international cooperation was needed to address the existential threat of climate change, especially for vulnerable countries as they dealt with shocks they had not caused.
She emphasize also on the need to work together to help countries deal with debt challenges.
