Issues Briefs for
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The IMF at a Glance - A Factsheet
The Managing Director's Activities in Africa
Ghana and the IMF
Kenya and the IMF
Mali and the IMF
Republic of Mozambique and the IMF
Nigeria and the IMF
Tanzania and the IMF
Recent economic developments have been encouraging in sub-Saharan Africa (SSA). Growth was more resilient than in most other regions during the recent global economic downturn, with real GDP increasing by more than 3 percent per annum in SSA in 2001 and 2002, compared with about 1½ percent in the advanced economies. Only countries in developing Asia and countries in transition grew faster than SSA.
Other indicators of economic stability have also been favorable, although there has been some variation across countries. Inflation rates have declined to single digits in most SSA countries; trade and current account balances have stabilized; and external debt burdens have continued on a declining trend, falling from 67 percent of SSA GDP at the end of 2000 to 64 percent of SSA GDP by the end of 2002.
|The driving factors behind these developments include progress in improving macroeconomic policies and supporting institutions as well as in resolving regional conflicts. The external environment has also become more favorable through a modest improvement in the terms of trade (mainly higher export prices of some major commodities) and increases in development assistance and debt relief. Prospects for lower trade barriers into industrial countries have improved with the passage of the EU's Everything But Arms initiative and the U.S.'s African Growth and Opportunity Act.
Encouragingly, these developments all represent progress toward achieving the Millennium Development Goals (MDGs), which are centered on halving poverty by 2015. In the March 2002 Monterrey Consensus, the international community recognized that a faster pace of reform and sustained, rapid growth were necessary to achieve those goals. The two-pillar strategy endorsed at Monterrey is based on low-income countries pursuing sound policies and good governance, matched by larger and more effective international financial and technical support. This is also the essence of NEPAD's strategy for promoting economic development in Africa which, in addition, emphasizes sovereignty and national ownership of economic policy.
Yet the achievements thus far are fragile and economic growth in Africa remains below potential--even at 3 percent per annum, it would take more than 40 years for SSA countries to reach the current average income level of other developing countries. And despite some successes, there are still pockets of regional and domestic turmoil, weak governance, inappropriate policies, and insufficient structural reforms. Notwithstanding the recent initiatives by the EU and U.S., barriers to trade remain high, and much depends on a successful completion of the Doha round of trade talks. HIV/AIDS, malaria, and other diseases will dampen growth, and serious droughts have taken a toll in the Horn of Africa, Southern Africa, and Western Sahel. In general, African countries remain very vulnerable to potential adverse shocks, given their lack of economic diversification.
The IMF is fully committed to playing its part in helping low-income countries reduce poverty through sustained growth. In particular:
The African continent has made considerable progress over the last ten years, with the restoration of macroeconomic stability, a necessary condition for sustainable growth and poverty reduction. But maintaining even this relatively good performance will not suffice to halve poverty by 2015, as envisaged in the Millennium Declaration. Africa has the potential for achieving higher growth - as much as 7 percent per year. This is an ambitious goal which will require that an effort be made on all sides: creating the domestic conditions for growth through sound policies and ensuring that the international environment is supportive of Africa's integration in the world economy. The IMF stands ready to work with its African members as they meet and overcome the challenges facing the continent.
1This Issues Brief was written for the IMF Managing Director's sixth trip to Africa, July 6-11, 2003.
Since assuming office in May 2000, Mr. Köhler traveled to Africa six times. Four of these trips were to sub-Saharan Africa.
July 2-8, 2000 - Theme: Listening and Learning
In his first visit to sub-Saharan Africa, Mr. Köhler traveled to Nigeria, Senegal, Cameroon, Mozambique, Botswana, and South Africa. The purpose of the trip was, first, to hear from the authorities on the economic situations and challenges facing their countries and second, to listen to the views of African leaders on the role of the IMF and its involvement in restructuring their economies. In his meetings, Mr. Köhler emphasized that there is today a single integrated world economy and the development of Africa is an essential component in ensuring its health.
· Mr. Köhler met government leaders and civil society in the countries.
· In Senegal he addressed the country's Economic and Social Council at a meeting that included representatives of the private business sector, labor movement, rural associations, and nongovernmental organizations.
February 18-25, 2001 (joint with Mr. Wolfensohn) - Theme: Promoting Collaboration for Development
As a follow-up to their commitment at the Prague 2000 Annual Meetings to put Africa at the center of their institutions' activities, Mr. Köhler and World Bank President James Wolfensohn traveled together to Mali, Tanzania, Nigeria and Kenya. The trip focused on the major issues confronting Africa-the need to reduce poverty through sustained economic growth, combat AIDS, strengthen governance, improve the investment climate, and resolve conflicts. The heads of the IMF and the World Bank were anxious to listen to how African leaders planned to address these issues and to discuss how the institutions could best support them in their efforts.
· In Mali Messrs. Köhler and Wolfensohn participated in meetings hosted by President Konaré of Mali and attended by Heads of State from West and Central Africa.
· They participated in discussions with Heads of State from Southern and East Africa, hosted by President Mkapa, in Tanzania.
· During this trip, they also participated in discussions with the Heads of State of Algeria, Nigeria, and South Africa on the program these leaders were jointly putting forward for Africa's recovery and development, which would soon be launched as the New Partnership for Africa's Development (NEPAD).
NEPAD was formally launched in October 2001. Its long-term goal is an end to poverty in Africa, underpinned by peace, democracy, and the rule of law; development of social and physical infrastructure; and the full participation of African countries in international trade.
May 13, 2001 - Visit to Egypt
Mr. Köhler met with President Hosni Mubarak and other officials to review economic developments and prospects. Discussions focused on how Egypt could build on progress made over the last decade in order to further raise rates of economic growth and job creation and alleviate poverty. Mr. Köhler stressed the importance of pursuing a more outward-oriented growth strategy, and discussed the measures that could achieve this and the assistance that the IMF could provide.
April 28-May 3, 2002 - Theme: Two Pillar Approach
· In addition to discussions with the presidents and other authorities of the five countries, a feature of the visit was Mr. Köhler's participation in a series of workshop discussions with the authorities, members of legislatures, civil society organizations and academics.
· In Accra, Ghana, Mr. Köhler attended the inaugural meeting, hosted by President Kufuor, of the Investors' Advisory Council for Ghana, a forum for promoting dialogue between the government and senior executives of local and multinational companies on ways to improve the investment climate.
· During the trip, the Managing Director launched the IMF's Africa Capacity-Building Initiative in response to an urgent call by African leaders to strengthen economic governance and the capacity of governments to carry out sound economic policies that contribute to reducing poverty. As part of the initiative, Mr. Köhler signed agreements to establish African Regional Technical Assistance Centers (AFRITACs) to enhance IMF support for capacity building. Subsequently, the East AFRITAC was opened in Dar-es-Salaam, Tanzania, in October 2002 and the West AFRITAC in Bamako, Mali, in May 2003.
October 14-21, 2002 - Theme: Regional Cooperation
· During his trip, Mr. Köhler met with presidents and other authorities and called upon the leaders of the three countries to enhance cooperation, stressing the stimulus that regional economic integration can provide to the Maghreb's development.
July 6-11, 2003 - Theme: Reinforcing engagement
During his latest trip to Africa, Mr. Köhler traveled to Ethiopia, Kenya, Madagascar, and Mozambique. The purpose of this visit was to discuss issues confronting these countries and the region, and to reinforce the IMF's continued engagement with Africa. In turn, the leaders of these countries expressed a strong desire for the IMF to remain closely engaged in supporting their economic reforms and poverty-reduction programs.
· During the visit Mr. Köhler held discussions with Prime Minister Meles of Ethiopia, President Kibaki of Kenya, President Ravalomanana of Madagascar, President Chissano of Mozambique, as well as governments, parliamentarians, and civil society.
· At the end of the trip, Mr. Köhler participated in the African Union summit meeting in Maputo, Mozambique and addressed the Heads of State at the opening ceremony.
IMF EXTERNAL RELATIONS DEPARTMENT