Tuesday, April 13, 2021

IMF urges African states to cut deficits as growth grinds lower

Must read

Somalia: Lawmakers vote to extend President’s term by two years

Somalia’s Lower House of Parliament has voted to approve a bill to extend President Mohamed Abdullahi Farmajo’s term in office by two years. The controversial...

Why Twitter picked Ghana as its head quarters in Africa

Social media giant, Twitter has announced that Ghana will host its Africa head quarters. The company's co-founder Jack Dorsey made the announcement on Twitter on...

Zambian athletes fight stigma against albinos, disabled persons

Lassam Katongo, a Zambian athlete based in the capital, Lusaka, shows off his trophies and medals earned from some of the international athletic games...

Uganda, Tanzania sign $3.5bn deal with global oil firms

The governments of Tanzania and Uganda on Sunday signed a long awaited oil deal with international oil firms—French Total E&P, and China’s Cnooc. The deal...
Isaac Kaledzihttps://en.wikipedia.org/wiki/Isaac_Kaledzi
Isaac Kaledzi is an experienced and award winning journalist from Ghana. He has worked for several media brands both in Ghana and on the International scene. Isaac Kaledzi is currently serving as an African Correspondent for DW.
- Advertisement -

The International Monetary Fund (IMF) said African exporters of oil, and commodities should remove subsidies and boost taxes to weather the slowest growth in more than two decades.

The Washington-based fund cut its 2016 growth forecast for Sub-Saharan Africa by more than half to 1.4 percent, from an initial forecast in May of 3 percent.

The director of IMF’s African Department, Abebe Selassie said growth could start to recover next year to 3 percent, only if the battered economies carry out fiscal reforms.

“The key risk is really whether or not countries will go ahead and do the required fiscal adjustments should they fail to do that I fear vulnerabilities will heighten and the crisis and the weak economic performance we have seen so far could get even more difficult,” he added.

Economies grew more than 5 percent in the decade leading to the commodity price drop but it is now being dragged by 23 resource-dependent nations like Nigeria, South Africa and Angola.

- Advertisement -

Nigeria, which is in its first recession for more than 20 years, has been seeking to widen its tax base, to offset lower revenues caused by the slump in oil prices.

“Now the good thing for Nigeria is that they have very low level of debt so Nigeria is a country where if we have coherent and consistent policy package it should be possible for them to get financing to support gradual and smother adjustment paths” said Selassie.

He noted that Zambia which has been hit by lower prices of copper, could save some money by eliminating fuel subsidies.

“Fuel subsides take up a huge amount of government resource and generally also they tend to be very regressive so the best way forward in addressing this really is to if it’s possible to eliminate this subsidies and put in place social protection programs for the people,” he said.

- Advertisement -

Kenya, a broad-based economy that is still growing at a robust 6 percent, was justified in expanding its fiscal deficit to invest in roads, power plants and other infrastructure.

According to Selassie, African nations needed to balance commercial debt, like Eurobonds, with other cheaper forms of financing from development institutions.

 

Source: Africanews

- Advertisement -

More articles

- Advertisement -

Latest article

Somalia: Lawmakers vote to extend President’s term by two years

Somalia’s Lower House of Parliament has voted to approve a bill to extend President Mohamed Abdullahi Farmajo’s term in office by two years. The controversial...

Why Twitter picked Ghana as its head quarters in Africa

Social media giant, Twitter has announced that Ghana will host its Africa head quarters. The company's co-founder Jack Dorsey made the announcement on Twitter on...

Zambian athletes fight stigma against albinos, disabled persons

Lassam Katongo, a Zambian athlete based in the capital, Lusaka, shows off his trophies and medals earned from some of the international athletic games...

Uganda, Tanzania sign $3.5bn deal with global oil firms

The governments of Tanzania and Uganda on Sunday signed a long awaited oil deal with international oil firms—French Total E&P, and China’s Cnooc. The deal...

Man with snails, ‘prekese’ in luggage from Ghana detained at JFK Airport

A man was detained briefly last week after arriving at JFK Airport with luggage full of snails, dried beef, turkey berry, carrot, oxtail, medicinal...
- Advertisement -