Opinion
Why Africa’s growth outlook is good
In particular, economic policies in the last decade have been directed firmly toward economic stability and market liberalization.
Inflation has been generally tamed, foreign reserves have risen, and debt burdens have been reduced – thanks, in part, to debt relief.
As a result, investment levels have risen steadily, banking systems are playing an expanded role in attracting savings and providing loans, and the adoption of new technologies is boosting labor productivity.
Robust economic policies also served sub-Saharan Africa well when the global crisis hit. Because inflation was low, and government fiscal positions were generally sound, countries were able to take measures to offset the sudden drop in demand for their exports.
Strong domestic deposit bases largely insulated African banking systems from global financial stresses.
As long as growth remains robust, governments should focus on improving their fiscal positions and build up sufficient cushions to be able to respond in the event of further global shocks.
Ragnar Gudmundsson is the IMF Resident Representative in Kenya
