With the highest growth rate in a decade and the lowest inflation in a quarter of a century, Africa now has a unique opportunity to boost growth, raise living standards, and reduce poverty, IMF Managing Director Rodrigo de Rato told African leaders at the African Development Bank’s Annual Meetings Symposium in Abuja, Nigeria, on May 17. His remarks came at the beginning of a fournation tour, which also included visits to Benin, Niger, and Chad. He exchanged views with a variety of political and civil society leaders on the IMF’s role in Africa and the external support, including debt relief, needed to help poor countries achieve the Millennium Development Goals (MDGs) by 2015. He also urged major African cotton producers at a Benin conference to step up efforts to improve the sector’s efficiency and avoid resorting to subsidies to support producer prices in the face of the large decline in world cotton prices.
Nigeria. Speaking at the African Development Bank symposium, de Rato underscored the IMF’s commitment to help Africa close the gap between economic performance and growth potential. “This gap must be addressed if African countries are to grow at the levels sufficient to achieve sustained improvements in standards of living and to meet the needs of a rapidly expanding labor force,” de Rato said. Africa’s growth reached an eight-year high of nearly 5 percent in 2004, with inflation under control, but growth of at least 7 percent a year is needed to reach the MDGs. The IMF can provide policy advice, financial assistance, and capacity building, he said, stressing the latter as an integral element of the IMF’s work in Africa. The focus in capacity building should be on financial sector reform, public resource management, and trade reform.
During a meeting with Nigerian President Olusegun Obasanjo, de Rato commended the prudent management of the economy last year, saying “fiscal restraint—along with a tight monetary policy and improved terms of trade—have helped strengthen Nigeria’s external position and restore macroeconomic stability.” He agreed with the Nigerian authorities that as the burden of controlling inflation falls to the Central Bank of Nigeria, it “should implement a monetary program consistent with its disinflation objectives.” De Rato also met with finance ministers of the Economic and Monetary Community for Central Africa and Omar Kabbaj, President of the African Development Bank.
Benin. In Cotonou on May 18, de Rato participated with cotton farmers, private sector firms, Beninese government officials, and the region’s other major cotton producers in a conference, seeking ways to mitigate the negative impact on these economies of sharply declining world cotton prices. He proposed that cotton-producing countries and development partners, including the IMF, take a joint approach that would cover the advanced economies’ removal of subsidies to their cotton sectors, improvements by African cotton-producing countries in the efficiency of their cotton sectors, the implementation of policies ensuring macroeconomic stability, and more donor support to help these economies undertake the needed reforms.
Niger. The challenges of raising growth and speeding up poverty reduction, while securing debt sustainability, topped the agenda with President Mamadou Tandja, Prime Minister Hama Amadou, and other policymakers and stakeholders during de Rato’s visit on May 18-19 to Niger—a country that reached its completion point and received “topping up” financing last year under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Talks centered largely on Niger’s post-HIPC needs to strengthen water management and road infrastructure in rural areas, where 80 percent of the country’s population lives, while continuing with privatization and financial sector reforms. He also visited the Women’s Dairy Cattle Project, a nongovernmental organization financed by the HIPC Initiative that is helping to increase rural employment opportunities for women.
Chad. On May 19-20, de Rato spoke with national officials about the increasing importance of transparently and efficiently managing revenues from oil production, which has become the economy’s largest sector. He also met with refugees who had fled the conflict in Darfur, Sudan.