The International Monetary Fund managing director Dominique Strauss-Kahn said in a speech in Kenya on Monday that the African nations were largely innocent victims of the Global Financial crisis. But it is emerging quickly from the downturn.
He said the IMF now forecast GDP growth of around 4.5% for Africa 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 added that there is no room for complacency regarding Africa’s economic outlook.
The crisis hit Africa through many different channels. For the first time in nearly two decades, average per capita incomes dropped marginally in 2009. The recovery in African began in the latter half of 2009. “All across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity.”
Good policies undertaken by African nations helped them to inoculate against a more severe downturn. He said the international community also helped Africa to cope with the crisis. The IMF committed US$3.6 billion in zero-interest lending to Africa, more than three times larger than in 2008.
The IMF chief is on a trip to Kenya, South Africa, and Zambia to meet political, business, and civil society leaders and assess the impact of the global economic and financial crisis on Africa.
According to Strauss-Kahn, the twin challenges for Africa are to revive strong growth and reinforce resilience to shocks. The crisis taught the lesson that nations that sowed in times of plenty were able to reap in times of loss. “Policy buffers must therefore be rebuilt, to allow for future counter cyclical responses, with fiscal policy and with reserves,” said Strauss-Kahn.