Minister Kenneth Ofori-Atta, Chairman of the African Caucus, and Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), co-chaired the African Consultative Group meeting today at the IMF Headquarters. They issued the following statement after the conclusion of the Group’s meeting in Washington D.C.:
“We had very productive discussions on Africa’s economic developments and prospects. The economic recovery in Africa is expected to continue. However, under current policies and amid increased global uncertainty, medium-term growth for the region is expected to continue to fall well short of what is needed to absorb new entrants to the labor force. The key challenge that Africa faces is to invest in human and physical capital to create jobs while at the same time reducing debt vulnerabilities.
“Against this backdrop, we agree that countries need to generate fiscal space, enhance resilience including to climate change, and create sustained high and inclusive growth, including by removing obstacles to greater gender equity. This will require, in particular:
- pursuing growth-friendly fiscal consolidations, where needed, that strike the right balance between development spending, reducing debt vulnerabilities, and meeting essential social needs.
- strengthening the effectiveness of monetary policy to enhance the monetary transmission mechanism.
- enhancing the flexibility of markets to facilitate adjustment to shocks and preserve competitiveness.
- removing trade barriers to boost medium-term growth, including in the context of the African Continental Free Trade Agreement; and
- addressing illicit financing flows and base erosion to enhance governance and strengthen revenue collection.”
Ms. Lagarde stated that “the IMF will remain closely engaged with its African members. The Fund will continue to support the authorities’ efforts to address the current macroeconomic and structural challenges and achieve a stronger, durable and inclusive growth to absorb new entrants in the labor force.”
Minister Kenneth Ofori-Atta echoed Ms. Lagarde on the economic prospects of the continent, and the willingness of the sub-region to work closely with the IMF to tackle emerging concerns. He emphasized the need for members to sustain commitment to structural reforms and encouraged the Fund to show patience in its program engagement when there is demonstrated ownership by country authorities for successful outcomes.
The African Consultative Group comprises the Fund Governors of a subset of 12 African countries belonging to the African Caucus (African finance ministers and central bank governors) and Fund management. It was formed in 2007 to enhance the IMF’s policy dialogue with the African Caucus. The Group meets at the time of the Spring Meetings, while Fund Management meets with the full membership of the African Caucus at the time of the Annual Meetings.