The Washington-based institution said in its 2010 economic outlook for sub-Saharan Africa that the region’s economic growth will be 5 percent this year, compared to 2.5 percent in 2009. That growth will put the region in second place internationally, behind Asia. But the region has still not recovered fully from the crisis, IMF officials said Monday while releasing the report in the Kenyan capital, Nairobi.
Next year the region’s economic growth is projected to be 5.5 percent and this will bring sub-Saharan Africa closer to the high average rates of 6 to 6.5 percent it registered between 2004 and 2008, said Abebe Selassie of the IMF’s African Department.
“Overall, we are not expecting any country to experience negative growth next year but that doesn’t always pan out,” said Abebe, who is the chief of the department’s regional studies division.
The report also said the Indian Ocean island of Madagascar, off Africa’s southeast coast, may register negative growth because of political instability there.
Sub-Saharan Africa’s recovery is faster than during the previous global economic crises of the 1980s and 1970s because it recorded high economic growth rates before the latest crisis and had lower budget deficits, said Abebe.
He said that there had been worries African economies will experience “a delayed effect,” from the global financial crisis but key trade and other indicators collected on a monthly or quarterly basis show recovery is on the way.
“So we are fairly confident there is not going to be a delayed effect from the global financial crisis,” Abebe said.
But he warned countries that rely heavily on foreign loans and grants to fund their budgets and grow their economies need that they need to cut back on such dependance.
“There is a risk going forward that this (aid) could fall off if advanced countries start cutting aid budgets in the coming years,” Abebe said.
Source: Yahoo