afrol News, 24 September - In a bid to address incessant problem and effects of high food and fuel prices in some African countries, new director of International Monetary Fund (IMF)'s African department, Antoinette Sayeh has called for direct deletion of shocks on poor members of population.

In an interview with IMF Survey online yesterday, she said IMF could help by providing policy advice and technical assistance as well as concessional financing to struggling continent members.

Ms Sayeh reminded that Africa was coming out of a very strong period of performance, which saw growth at an average of five percent from 1995 to 2007, underpinned by good policies in most countries.

She noted that for past five years, Africa's economies have been making good progress, adding that continent has to preserve that achievement as solid basis for making progress toward Millennium Development Goals.

"Overall growth in sub-Saharan Africa is expected to dip to six percent in 2008 before rebounding to six and half percent in 2009, but with a somewhat larger difference between oil exporters and oil importers. On inflation front, of course, we have seen acceleration in prices this year. We think that we will get into double-digit inflation during course of 2008 but, if countries pursue appropriate policies, we expect that rate to decelerate below 10 percent in 2009," she said.

She added that all countries now face a more difficult external environment, with some in danger of losing progress and momentum that they've made these past years.

Ms Sayeh said poor countries were particularly affected by increases in food prices, with food constituting some 50 percent of budget of most poor people in Africa.

"So it's a major concern to us that governments are able to preserve gains that they've made and are not tempted, as is often case, to resort to populist policies to respond to shocks," she said.

She noted that lack of adequate infrastructure in some countries was key impediment, adding that it was imperative to find ways of financing infrastructure.

She thus welcomed new partners and new aid providers such as China to accelerate growth in most countries.

"I think some of most critical characteristics of fragile states, are fragility of peace in some countries, absence of capacity, and need for quick results. Fund can do a lot to help with all of those challenges," she said.

About Fund's African members at IMF and World Bank Annual Meetings to be held later this year, she said their main concern would be impact of fuel and food crisis and how they have responded, and how the Fund has helped them to respond.

She added, "Here, we want to reiterate advice that we've been giving African countries in terms of short-term efforts to protect poor from impact of shock, and emphasised need to make sure that policy response is sustainable and that countries mitigate impact on inflation by pursuing appropriate monetary policies."

Ms Fayeh noted that there would be some countries with which IMF would discuss possible additional financing from Fund while with others, monetary body would talk about advice it could give them in managing their own response to crisis.

"We will also be talking about how to mitigate the risk to debt sustainability from borrowing to finance infrastructure and, hopefully, looking at some of the issues around debt management and challenges of financing infrastructure," she said.

She concluded, "We want to also talk about how we're positioning Fund to respond to needs of fragile states and how we're looking at reform of different lending instruments to help countries deal with various shocks."

Ms Sayeh has served as Liberia's finance minister, prior to her current appointment.

By staff writer

© afrol News

Related pages and feature

Current afrol News Top Stories