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Africa: IMF - Meltdown Threatens Continent's Economic Successes

Constance Ikokwu

Washington, DC — The International Monetary Fund (IMF) has warned that the global financial meltdown is threatening to wipe out the financial successes recorded by African countries in the past decade.

"The gains of the past decade, during which many countries in sub-Saharan Africa saw sustained high rates of economic growth and rising income levels, are at risk," observes the Director of Africa Department at the IMF, Antoinette M. Sayeh.

Sayeh spoke in Dar es Salaam, Tanzania at a high-level conference: "Changes: Successful Partnerships for Africa's Growth Challenge," jointly organised by the Fund and the government of Tanzania, to address the impact of the global downturn on Africa.

Sayeh noted that the conference is an avenue for Africa and the Fund to discuss what more could be done to help countries neck-deep in crisis at the this time. She added that the IMF wishes to reaffirm its partnership with the continent during this difficult period.

According to Sayeh, the IMF has increased its financial support to African countries under its new Exogenous Shock Facility, in addition to stepping up technical assistance.

Also, in a new report entitled "The Impact of the Global Financial Crisis on Sub-Saharan Africa," which was released in Dar es Salaam, the Fund says economic growth in sub-Saharan Africa is expected to slow to 3 per cent in 2009 from 5 per cent in 2008, half of what was expected a year ago.

"African policymakers must balance two competing priorities: supporting domestic activity while maintaining macroeconomic stability. Some countries have the space for fiscal easing. They need to respond by targeting the poor and putting in place social safety nets. But some others have fiscal constraints and need to act carefully in order to protect their macroeconomic gains," said Sayeh.

She called on donors to scale up their commitments instead of reducing support at this crucial time. Policymakers need additional support from donors in order to effectively stem the tide, she concluded.

Source: http://allafrica.com

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