{ "title": "Transcript of the October 2019 Annual Meetings African Department Press Briefing", "publication": "IMF News, October 18, 2019", "sourceUrl": "https://www.imf.org/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing", "canonical": "https://www.imf.org/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing", "overlayPath": "/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/index.md", "summary": "Growth in Sub-Saharan Africa is expected to pick up:", "publishDate": "2019-10-18", "sections": [ { "heading": "Regional growth outlook", "content": "- Growth in Sub-Saharan Africa is expected to pick up:\n - \"around the 3.2 percent mark\" for 2019.\n - \"rising to 3.6 percent in 2020.\"\n- Relative to April, growth has been revised down for about two-thirds of countries this year, \"albeit by a modest 0.3 percentage points for the region as a whole.\"\n- Large heterogeneity across countries:\n - Non-resource intensive countries (described as \"this 24 or so non-resource intensive countries, home to about a half a billion people\"):\n - Expected to grow at \"about 6 percent\", \"almost three times faster than the growth rates\" in resource intensive countries.\n - Will see per capita income \"rising markedly faster than the rest of the world.\"\n - Resource- or commodity-reliant countries (\"these 21 countries\"):\n - Growth \"is at around the 2.5 percent mark.\"\n - In per capita terms, growth \"remains lower than much of the rest of the world.\"" }, { "heading": "Downside risks to the outlook", "content": "- External risks:\n - Rising protectionism.\n - Potential rising risk premiums for international markets.\n - Faster-than-anticipated slowdown in trading partners (examples cited: China, the Euro area).\n- Domestic risks:\n - Failure to implement fiscal policies as envisioned to help stabilize debt levels.\n- Country-specific factors:\n - Policy uncertainties holding back investment in some larger economies." }, { "heading": "Policy strategy: three-pronged approach", "content": "- Near-term policy mix:\n - Fiscal space is limited in many countries; \"the room for supporting growth\" mainly lies on the monetary policy side where inflation is below targets and growth is below potential.\n- Build resilience:\n - Strengthen public financial management to avoid debt sustainability problems and the buildup of domestic arrears.\n - Balance investment needs with debt sustainability.\n - Continue efforts to diversify economies to reduce reliance on commodity exports.\n- Inclusive, labor-intensive growth:\n - Ensure growth remains labor-intensive to create jobs for millions entering the labor market annually.\n - Reforms to facilitate implementation of the AFCFTA now that it has been ratified by most countries.\n - Facilitate competition between firms to raise growth and improve welfare (analytical work in the Regional Economic Outlook highlights significant potential)." }, { "heading": "African Continental Free Trade Area (AFCFTA) and intra-African trade", "content": "- IMF assessment:\n - AFCFTA described as \"one of the most exciting policy developments across the region.\"\n - Analytical work (April Regional Economic Outlook) shows \"tremendous potential\" to facilitate higher economic growth and diversification toward manufactured, processed goods traded intra-Africa.\n- Implementation challenges to realize gains:\n - Tariff reduction per the agreement plus removal of non-tariff barriers.\n - Address infrastructure constraints that hamper trade.\n- Estimated impact on intra-Africa trade:\n - Trade would be increased \"by at least -- close to, between 16 and 20 percent, or so, as a result of the AFCFTA.\"\n - Additional gains possible when accounting for shifts toward manufactured goods and value-added trade.\n- Distributional concerns:\n - Risk that larger economies may dominate; policy measures needed to support sectors and regions that may face dislocation.\n - Competition with external partners (e.g., China, Europe) also a consideration." }, { "heading": "Trade tensions, global slowdown, and supply-chain shifts", "content": "- Conjunctural impact:\n - Africa has been affected by the global slowdown in trade volumes; softness in exports contributed to lower regional growth.\n- Medium-term opportunities:\n - Early signs of relocation of low-skill manufacturing to parts of Sub-Saharan Africa (example cited: Ethiopia and some coastal eastern seaboard countries).\n - The pace depends on how quickly Asian countries move up the technology ladder and how rapidly African countries attract capital." }, { "heading": "Debt, financing, and China", "content": "- IMF stance:\n - China is a \"very important development partner\" for many Sub-Saharan African countries.\n - IMF concern centers on overall debt levels and the sustainability of borrowing regardless of creditor.\n - Key issues:\n - What the borrowed funds are used for (ability to capture rate of return on infrastructure, health, education investments).\n - Striking a balance between development needs and avoiding debt unsustainability.\n- IMF engagement modalities:\n - Programs with financing where requested.\n - Policy advice to all countries.\n - Capacity development, including debt management, on request." }, { "heading": "Country cases and specific issues", "content": "- Nigeria:\n - Slow growth despite policy initiatives; implementation of the ARGP and policy reforms is critical.\n - Need to increase non-tax revenues to fund infrastructure, education, health; non-tax revenues remain \"very low at 7/8 percent\" in the country.\n - Monetary policy: inflation dynamics discussed in context of Nigeria; IMF referenced \"11.7 inflation rates by 2020\" in the question and attributed inflation drivers to adjustment to lower commodity prices, exchange rate shocks, and food-price related shocks. Recommended continued central bank efforts to bear down on inflation and allow gradual decline.\n - Poverty and inequality:\n - Large within-country variation in poverty and social outcomes; region-specific interventions and higher overall growth needed.\n - Diversification away from oil, better business environment, and more resources for infrastructure, health, education are priorities.\n- Mozambique:\n - Hidden debts over $2 billion led IMF to require three elements before re-engagement:\n - Explanation/audit of the debts and transparency (audit has been completed).\n - Restoring debt sustainability.\n - Agreement on a program with supporting policies.\n - IMF provided emergency support after Cyclone Idai and continues policy engagement; no outstanding request for program engagement at the time of the briefing.\n- Cabo Verde:\n - IMF spokesperson was \"not aware of the transaction\" referenced regarding hidden debts of 65 million and said they would try to find out.\n- Ghana (banking sector clean-up):\n - Costly financial sector clean-up (nearly 12 billion Ghana cedis; collapse of about seven banks) underscores importance of strong supervision and real-time regulation.\n - Not cleaning up the sector risks even higher eventual fiscal and economic costs." }, { "heading": "Regional monetary integration and insecurity", "content": "- ECOWAS common currency:\n - Leaders and the ECOWAS commission have set out preconditions (including convergence criteria); IMF encourages following the laid-out steps and conditions.\n- Xenophobic attacks and insecurity:\n - Recognized as a serious challenge with risk of spillovers and loss of life; policing, containment, and improved mutual understanding are needed to prevent escalation and protect trade relations." }, { "heading": "Climate change, natural disasters, and resilience", "content": "- Recent climate shocks cited:\n - Cyclone Idai and Cyclone Kenneth.\n - Drought in Southern Africa affecting countries like Zimbabwe and Zambia.\n - Desertification in the Sahel and population movements linked to climate pressures.\n- IMF role and priorities:\n - Provide rapid support in the aftermath of shocks.\n - Support policies and investments to build climate resilience and more climate-resilient state capacity and infrastructure.\n - Encourage countries to pursue investments and policies that increase resilience while balancing debt sustainability." }, { "heading": "Health, pandemics, and preparedness", "content": "- IMF role:\n - Not a health specialist, but works to ensure countries have resources to invest in health systems, education, and infrastructure.\n - Past experience: support to Liberia during the Ebola outbreak; countries with stronger health systems (e.g., Nigeria) were better able to contain outbreaks.\n- Policy priority:\n - Upgrade health service provision and state capacity so economies are more resilient to pandemics.\n - Ensure sufficient fiscal resources through taxes and borrowing to fund health investments." }, { "heading": "Monetary and fiscal policy calibration under external headwinds", "content": "- Fiscal policy:\n - Limited fiscal space in many countries; priority on stabilizing debt levels.\n - If severe global slowdown materializes, IMF would consider recalibrating fiscal plans (e.g., delaying planned adjustments by a year or two) while ensuring medium-term debt reduction.\n- Monetary policy:\n - More room in many countries on monetary policy as inflation trends have generally declined; use monetary policy where appropriate to support growth." }, { "heading": "Miscellaneous statistics, events, and recommendations", "content": "- Conference announcement:\n - IMF, together with the government of Senegal, will host a conference on Sustainable Development, Sustainable Debt, on December 2nd in Dakar, aiming to identify policy proposals to balance development needs and avoid debt vulnerabilities.\n- Key quantitative figures preserved from the briefing:\n - Growth projections: \"3.2 percent\" (2019), \"3.6 percent\" (2020).\n - Regional revision: \"0.3 percentage points\" downward for the region as a whole.\n - Non-resource intensive growth: \"6 percent\".\n - Resource-intensive growth: \"2.5 percent\".\n - Number of resource-intensive countries: \"21 countries\".\n - Description of non-resource intensive grouping: \"this 24 or so non-resource intensive countries, home to about a half a billion people\".\n - AFCFTA trade uplift estimate: \"between 16 and 20 percent, or so\".\n - Nigeria non-tax revenues: \"7/8 percent\".\n - Reference to \"11.7 inflation rates by 2020\" as cited in the briefing exchange.\n\nTranscript of the October 2019 Annual Meetings African Department Press Briefing, IMF Communications Department, October 18, 2019\n\n---\n\n\n References\n\n- Ghana and the IMF\n- Nigeria and the IMF\n- Republic of Mozambique and the IMF\n- The Federal Democratic Republic of Ethiopia and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/bundle-manifest.json)", "Published: October 18, 2019", "Growth in Sub-Saharan Africa is expected to pick up:", "Relative to April, growth has been revised down for about two-thirds of countries this year, \"albeit by a modest 0.3 percentage points for the region as a whole.\"", "Large heterogeneity across countries:", "External risks:", "Domestic risks:", "Country-specific factors:", "Near-term policy mix:", "Build resilience:", "Inclusive, labor-intensive growth:", "IMF assessment:", "Implementation challenges to realize gains:", "Estimated impact on intra-Africa trade:", "Distributional concerns:", "Conjunctural impact:", "Medium-term opportunities:", "IMF stance:", "IMF engagement modalities:", "Nigeria:", "Mozambique:", "Cabo Verde:", "Ghana (banking sector clean-up):", "ECOWAS common currency:", "Xenophobic attacks and insecurity:", "Recent climate shocks cited:", "IMF role and priorities:", "IMF role:", "Policy priority:", "Fiscal policy:", "Monetary policy:", "Conference announcement:", "Key quantitative figures preserved from the briefing:", "[Ghana and the IMF](http://www.imf.org/external/country/GHA/index.htm)", "[Nigeria and the IMF](http://www.imf.org/external/country/NGA/index.htm)", "[Republic of Mozambique and the IMF](http://www.imf.org/external/country/MOZ/index.htm)", "[The Federal Democratic Republic of Ethiopia and the IMF](http://www.imf.org/external/country/ETH/index.htm)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/index.md", "json": "/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/index.json", "bundleManifest": "/en/news/articles/2019/10/19/tr101819-transcript-of-october-2019-african-department-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T23:10:33.398Z" }