Africa is at a turning point, but the IMF says economic reforms must continue.

Africa, according to the International Monetary Fund (IMF), is at a turning point after going through several shocks in the last four years that sent several of its economies into crisis.

The area is seeing a sea change. Mr. Abebe Aemro Selassie, Director of the African Department, stated, “I am confident that this moment could set the stage for this century to be the African century with the right policy choices today.”

The Ghana News Agency was covering his speech at the IMF Regional Economic Outlook for Africa on Friday, April 20, 2024, in Washington, US.

During the COVID-19 pandemic of 2020, the continent had a negative economic growth of -1.6%; however, it has now stabilized and is once again on a positive growth path.

The Saudi Finance Minister, Mohammed Al-Jadaan, and the Finance Minister of Spain, Nadia Calvino, attend the IMFC Plenary at the 2024 Spring Meetings of the World Bank Group and International Monetary Fund in Washington on April 19, 2024. Also present are Managing Director Kristalina Georgieva, First Deputy Managing Director Gita Gopinath, and IMFC Chair. IMF Illustration by Lewis Joly.

According to IMF predictions, Africa’s Gross Domestic Product (GDP) decreased from 4.7% in 2021 to 4.0% in 2022, then further to 3.4% in 2023. However, by 2024, the GDP would have increased to 3.8 percent, and by 2025, it would have reached 4.0 percent.

He pointed out that maintaining economic growth would enable the nations in the area to create jobs, diversify their economies, increase living standards for all, and strengthen their resistance to shocks.

Moving forward, he suggested that governments in the region prioritize three things: strengthening structural policy reforms, maintaining steps to reduce inflation, and enhancing public finance.

However, nations shouldn’t bear the entire weight. The international community’s assistance will continue to be crucial, he stated, adding that the IMF was prepared to help having already given the area US$58 billion in funding since the pandemic’s beginning.

The Fund stated in the Regional Economic Outlook that while governments in Africa were still battling high borrowing prices, rollover risks, and a lack of liquidity, the continent has managed to regain its footing.

It advocated for better public finances with an emphasis on revenue mobilization, for structural reforms to be implemented to attract more foreign direct investments, and for price stability to be maintained while growth is supported. Examples of these changes include accelerating trade integration and enhancing the business environment.

The research also reaffirmed the need for assistance from the global community, pointing out that from 2024 to 2028, sub-Saharan African nations will require an estimated $70 billion in gross external financing year or 6% of their GDP.

The report said, “Official bilateral and multilateral creditors must continue to play a critical role in financing the region and supporting domestic policy and reform efforts.”