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'Africa is back' from global crisis, says IMF

Wednesday, 17 March 2010 11:35

Source: Times Live
By Sapa-dpa

Africa is recovering from the global economic crisis and could see growth of 4.5 per cent in 2010, says the International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn.

"I think that Africa is back - although a lot depends on a global recovery that is still in its early stages " Jacob Zuma

"All across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity," Strauss-Kahn said during a panel discussion at the University of Nairobi.

"In 2010, the IMF expects growth of around 4.5 percent," he added. "In short, I think that Africa is back - although a lot depends on a global recovery that is still in its early stages."

While having limited exposure to international capital markets, Africa suffered as trade and capital flow fell and remittances from Africans living outside the continent dropped off.

According to IMF figures, 2009 growth in sub-Saharan Africa fell to around 2 percent after averaging 5-7 percent previously.

Strauss-Kahn said this prompted an "an enormity of human suffering".

"In other parts of the world, you might lose your job, or maybe your house, in this kind of crisis," he said. "In Africa, you could very well lose your life, or the life of your child."

The IMF chief said many African nations had helped ward off more serious problems by implementing good financial policies prior to the crisis, but warned against complacency for the future.

"This is not the time to rest on our laurels," he said.

Swings in commodity prices, instability, natural disasters and over-reliance on aid and remittances remain major risk factors, he said.

Strauss-Kahn said that fiscal policy should be used to increase resilience to shocks and warned against growing inequality on the continent.

He also warned that climate change could have a drastic impact on African economies, saying that "without action, Africa will suffer more from drought, flooding, food shortages, and disease possibly provoking further instability and conflict".

The IMF has proposed a "Green Fund", which could raise 100 billion dollars per year by 2020, to mitigate the effects of climate change, he said.