Inflation, Debt, push African economies to the brink-IMF

The International Monetary Fund has said inflation, debt, and forex crisis is pushing the Nigerian and other African economies to the brink.

The Managing Director of the IMF, Kristalina Georgieva, disclosed this in an article titled, ‘Facing a Darkening Economic Outlook: How the G20 Can Respond,’ on the IMF’s website.

The report comes ahead of a meeting of G20 ministers and central bank governors in Bali, later this week.

The report added that most countries on the continent could raise money from the global financial markets and do not have large domestic markets to turn to.

She stated, “The particularly difficult conditions in many African countries at this moment is important to consider. In my meeting with Ministers of Finance and Central Bank Governors from the continent this week, many highlighted how the effects of this, entirely exogenous, shock was pushing their economies to the brink.

“The effect of higher food prices is being felt acutely as food accounts for a higher share of income. Inflation, fiscal, debt and balance of payments pressures are all intensifying. Most are now completely shut out from global financial markets; and unlike other regions don’t have large domestic markets to turn to.

“Against this backdrop, they are calling on the international community to come up with bold measures to support their people. This is a call we need to heed.”

According to her, a new IMF report to the G20 outlines policies that countries can use to navigate this sea of troubles.

The report recommended that “countries must do everything in their power to bring down high inflation.”

“Second, fiscal policy must help—and not hinder—central bank efforts to bring down inflation.

“Third, we need a fresh impetus for global cooperation—led by the G20.”

IMF/Hauwa Abu