International Monetary Fund First Deputy Managing Director Mr. David Lipton, stated that the continent’s economic growth may be slowing down during a public lecture held at Strathmore Business School on 9th May 2016.
“Over the past 15 years Sub-Saharan Africa has seen remarkable economic and social growth, a significant gain since 1990. 2016 could be marked by a subdued global growth, with Sub-Sahara Africa’s economic forecast anticipated to be 2% this year,” he said.
He attributed this economic retrogression to the global economic environment, decline in oil prices, a slowdown in investments and trade and declining capital flows.
“Sub-Saharan Africa is feeling the effects of lower oil and commodity prices as well as less affordable financing terms. The economic strength in Sub-Sahara Africa has weakened substantially, with the slowdown expected to continue this year with a growth projection of 2%,” said Mr. Lipton.
He noted that the current slowdown is particularly pronounced in countries vigorous in commodity export such as Angola, Nigeria and South Africa. However, frontier markets and countries that do not export commodities such as Kenya, are more likely to exceed a 5% growth rate, having been favorably placed to the slowdown effects.
“Kenya and such like countries should recalibrate their policies to adjust from domestic to international financing options. They should use their strength to contain increases in public debt, pursue prudent monetary policy, keep inflation low and build reserves which can cushion vulnerabilities in the future. Now is the time to move forward with reform agendas which will open up new possibilities for countries in the region,” he concluded.
Watch Lipton’s Full Address