Investment, Diversification Key to Growth—African Ministers
IMF News, April 24, 2017
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- Published: April 24, 2017
Overview
- Publication date: April 24, 2017
- Context: Remarks by African Finance Ministers during the IMF-World Bank Spring Meetings in Washington, D.C.
- Central message: Boosting private investment and diversifying revenue streams are pivotal to increasing growth in the current environment.
Findings and country perspectives
- Gabon (Finance Minister Regis Immongault)
- Oil revenues are "significantly down."
- Finding the resources to build much needed infrastructure is becoming increasingly difficult.
- Policy emphasis: "We must make hard choices and choose those projects that will boost growth."
- Need to make the business environment more attractive for private investors to participate in financing infrastructure projects.
- Senegal (Finance Minister Amadou Ba)
- Senegal continues to experience growth above 6 percent.
- Private investment is crucial to sustaining this level of growth.
- Policy action: Established special economic zones where businesses can operate with fewer regulatory obstructions.
- Quote: "It's a space where we’ve tried to create a business environment that is consistent with international best practices to attract more foreign investors."
- Liberia (Finance Minister Boima Kamara)
- Liberia has experienced zero percent growth since 2014, attributed to lingering effects of the Ebola crisis and weak global demand for iron ore and rubber.
- Lesson: Diversification is essential; reliance on extractive industries leaves the economy vulnerable.
- Recommended comparative advantage: Leverage agriculture to build a resilient economy.
- Note on governance: Since the civil war ended in 2003, Liberia has enjoyed relative peace and stability; good governance is important for regional development.
- Quote: "The quality of life for people in our respective countries will be reflected in the quality of our laws, and how those laws are respected."
Policy recommendations and priorities (as expressed by ministers)
- Prioritize projects that will boost growth when resources are limited.
- Improve the business environment to attract private investors for infrastructure financing.
- Promote private investment as essential to sustaining high growth rates (example cited: Senegal’s >6 percent growth).
- Establish policy frameworks (e.g., special economic zones) that reduce regulatory obstructions and align with international best practices to attract foreign investment.
- Diversify economic bases away from extractive industries toward sectors such as agriculture to enhance resilience.
- Strengthen governance and the rule of law to support development and improve quality of life.
IMF NEWS — April 24, 2017