The International Monetary Fund (IMF) has revealed that growth in sub-Saharan Africa is expected to slow to 3.6 percent in 2023.

The IMF, through its Director of the African Department, Abebe Aemro Selassie, while speaking to newsmen on Friday, said the projected slowed growth is a result of a “big funding squeeze”, which is connected to the drying up of aid and access to private finance.

“I wish I was bearing better news, but unfortunately, we’re expecting growth to decelerate from 3.9 percent to 3.6 percent in 2023. And this to a large extent reflects the big funding squeeze tied to drying up of aid and access to private finance,” Selassie said.

“So, there are a number of reforms that need to be pursued. I think first and foremost, of course, is policies to strengthen the resilience of economies. So, in many countries, for example, there’s a big challenge in mobilizing more domestic revenues. That needs to be addressed wherever that’s the main challenge.

“Second, I think it’s also important to consider policies to insulate domestic economies from the external environment. So, allowing exchange rates to adjust, interest rates to be recalibrated, to reflect better to reduce inflation are all going to be very important parts of the policy response to this adverse external environment,” added Selassie.

“We are engaging like never before with the region. Of course, over the last couple of years, we’ve provided considerable financing to the tune of around $50 billion to support the region. Whether the very difficult economic environment that was facing and we continue to try and provide as much financing as possible to support countries in the coming months.

“As important, however, of course, are policies and reforms that need to be pursued by countries, and we are deeply engaged with working with countries to navigate and to put in place the right types of policies in each individual country,” said Selassie.

With a typical tax ratio of only 13 percent of GDP in 2022, Sub-Saharan African nations considerably fall behind other emerging economies, developing nations, and developed economies in terms of revenue collection.

The IMF has supplied the area with around $50 billion in financing.

The IMF says it will continue to work with the region to implement the correct kinds of policies that are suited to the requirements of each nation.

IMF projects 3.6% economic growth in sub-Saharan Africa

The International Monetary Fund (IMF) has revealed that growth in sub-Saharan Africa is expected to slow to 3.6 percent in 2023.

The IMF, through its Director of the African Department, Abebe Aemro Selassie, while speaking to newsmen on Friday, said the projected slowed growth is a result of a “big funding squeeze”, which is connected to the drying up of aid and access to private finance.

“I wish I was bearing better news, but unfortunately, we’re expecting growth to decelerate from 3.9 percent to 3.6 percent in 2023. And this to a large extent reflects the big funding squeeze tied to drying up of aid and access to private finance,” Selassie said.

“So, there are a number of reforms that need to be pursued. I think first and foremost, of course, is policies to strengthen the resilience of economies. So, in many countries, for example, there’s a big challenge in mobilizing more domestic revenues. That needs to be addressed wherever that’s the main challenge.

“Second, I think it’s also important to consider policies to insulate domestic economies from the external environment. So, allowing exchange rates to adjust, interest rates to be recalibrated, to reflect better to reduce inflation are all going to be very important parts of the policy response to this adverse external environment,” added Selassie.

“We are engaging like never before with the region. Of course, over the last couple of years, we’ve provided considerable financing to the tune of around $50 billion to support the region. Whether the very difficult economic environment that was facing and we continue to try and provide as much financing as possible to support countries in the coming months.

“As important, however, of course, are policies and reforms that need to be pursued by countries, and we are deeply engaged with working with countries to navigate and to put in place the right types of policies in each individual country,” said Selassie.

With a typical tax ratio of only 13 percent of GDP in 2022, Sub-Saharan African nations considerably fall behind other emerging economies, developing nations, and developed economies in terms of revenue collection.

The IMF has supplied the area with around $50 billion in financing.

The IMF says it will continue to work with the region to implement the correct kinds of policies that are suited to the requirements of each nation.