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Kenya: Africa advised to rebuild Economic Growth Policies

The International Monetary Fund (IMF), Managing Director Strauss-Kahn has called on Africa to rebuild policies that will counteract global economic crisis, reports CISA.

Strauss-Kahn said this during a High-Level Panel at the University of Nairobi, Kenya, on March 8 where he also mentioned that IMF staff are working on the idea of a “Green Fund” with a capacity to raise USD100 billion a year by 2020.

He said transforming Africa’s economy to boost living standards and increase resilience to shocks is a hefty agenda, therefore, Africa must take a leadership role.

“Of course, the international community must also play its part. In our increasingly integrated world, a prosperous Africa is in everybody’s interest. It is a two-way process,” the UN commissioner for human rights said.

“Good governance begins at home. Africans must put the common good ahead of parochial concerns,” Strauss-Kahn stressed.

He added that at the same time, richer countries must not cave in to domestic political pressures at the expense of future generations and poorer countries. They must resist the temptation to reduce aid, or engage in protectionism.

“IMF expects growth of around 4½ percent in 2010. In short, I think that Africa is back although a lot depends on a global recovery that is in its early stages,” he said.

Strauss-Kahn said that because many African countries had undertaken good policies before the global economic crisis, this had helped to inoculate them against a more severe downturn, strengthening budget positions, reducing debt burdens, holding down inflation and building comfortable reserve cushions.

Strauss-Kahn emphasized that there was no room for complacency regarding Africa’s economic outlook. “This is not the time to rest on our laurels.”

“Africa remains highly vulnerable to economic dislocation from many different sources. Think about swings in commodity prices, natural disasters, or instability in neighboring countries. Think about the risks that come from relying heavily on remittances, aid and financial flows.”

Looking forward, he said the twin challenges for Africa are to revive strong growth and reinforce resilience to shocks.

Policy buffers must therefore be rebuilt, to allow for future countercyclical responses, with fiscal policy and with reserves. Social safety nets must be strengthened this is the first line of defense against adverse shocks.

“We should also beware that widening income inequality across regions or segments of the population can aggravate tensions and make shocks more destabilizing.”

Strauss-Kahn also drew attention to the challenge of climate change, calling upon the international community to marshal the resources needed to help developing countries, particularly low-income countries.

He said that without action, Africa will suffer more from drought, flooding, food shortages and disease, possibly provoking further instability and conflict.”

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TAGS: Kenya Economic Growth Policies global economic crisis human rights

[03/10/2010]

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