The Financial Crisis and Decades of Reforms: Options for Africa’s Future Reforms
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The Financial Crisis and Decades of Reforms: Options for Africa’s Future Reforms. May 2009 Antoinette Monsio Sayeh Director, African Department International Monetary Fund.

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Disclaimer the views expressed herein are those of the author and should not be attributed to the imf its executive bo

The Financial Crisis and Decades of Reforms: Options for Africa’s Future Reforms

May 2009Antoinette Monsio SayehDirector, African DepartmentInternational Monetary Fund

Disclaimer: The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board, or its management.


Agenda

Agenda

What can we learn from Africa’s reform successes and how can these reforms be preserved or deepened?

What can we learn from Africa’s reform successes and how can these reforms be preserved or deepened?

How should African governments handle the domestic fallout of the ongoing crisis and push forward with economic and trade reforms?

What is the role of the state vis-à-vis the private sector in weathering the storm?


Reform success stories

Reform success stories

  • 17 high-growth countries: (4 oil exporters, 4 middle-income, and 9 LICs)

  • 14 low-growth countries (12 of them fragile states)

  • 13 medium-growth countries

Sub-Saharan Africa:

GDP per Capita Growth Rates

Source: IMF, World Economic Outlook


African success stories getting the critical basis right

African success stories: Getting the critical basis right

  • Macroeconomic stability

  • Avoiding major policy failures

  • Reinforcing institutions

  • Proactive role of government

  • Higher aid


Fallout from the ongoing global crisis

Fallout from the ongoing global crisis

2008 and Current Forecast for 2009

Source: IMF, African Department database


All countries will be affected by the crisis including some star performers

All countries will be affected by the crisis, including some star performers

Impact of the Crisis on Growth in Sub-Saharan Africa 1

Source: IMF staff estimates


How can the challenges be dealt with in the short term

How can the challenges be dealt with in the short-term?

  • Use available fiscal space

  • Where possible, ease monetary policy and let the exchange rate adjust to the external environment

  • Closely monitor financial vulnerabilities and be prepared to act promptly

  • Strengthen social safety nets


What are the implications of the crisis for structural reforms

What are the implications of the crisis for structural reforms?

  • It is important now to move ahead with planned structural reforms in:

    • Public financial management

    • Social safety nets

    • Cost of doing business

  • Countries also need to avoid new restrictions on trade flows as they work to mitigate the impact of the global crisis.


Role of the state versus the private sector in a time of crisis

Role of the state versus the private sector in a time of crisis?

  • Near-term

    • More active aggregate demand policies

    • Strengthening of financial sector surveillance

  • Medium-term

    • Larger focus on improving supervisory and regulatory environment

    • Private sector as engine of growth


How can the international community help

How can the internationalcommunity help?

  • African countries require the support of the international community to respond effectively to the global crisis.

  • The international community should endeavor to meet or exceed the G-8 Gleneagles commitments.


The role of the imf

The Role of the IMF

  • The IMF is taking important steps to help African countries meet the challenges of the crisis:

    • Doubling concessional lending to low income countries

    • Working on a proposal to increase the general SDR allocation

    • Revising its lending instruments to make them more flexible

    • Continuing to provide policy advice and extensive technical assistance for strengthening economic policymaking in Africa


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