The International Monetary Fund (IMF) has called on African policymakers to adjust to cope with the economic growth slowdown and other challenges affecting the continent. IMF says fiscal policymakers need to strike an appropriate balance between debt sustainability considerations and addressing development needs. Like in other regions of the world, sub-Saharan African countries are currently facing large current and fiscal deficits which have seen a shift from surplus to deficit. The current IMF regional economic outlook for sub-Saharan Africa reveals that economic activity in the region has weakened markedly although growth remains stronger than in many other regions, with growth expected at 3.75 per cent in 2015 and 4.25 per cent in 2016. This is due to decline in global economic growth of 3.1 per cent from 3.3 per cent resulting into slow global trade and capital flows. Presenting the regional economic outlook from the global perspective in Kampala last week, Leon Gene, the IMF resident representative in Nigeria said some global risks have spread into Africa. Stagnation They are tight financial conditions leading to high cost of available fi- nance for investment, exacerbating impact of weak commodity prices on exporters, risk of sudden stop in financial flows to emerging markets, slower growth in China, lower potential output growth in emerging markets and risks of stagnation in advanced economies. “Security-related risks still prevail in a number of African countries, commodity prices could fall further, especially in the event of a more rapid slowdown in China, and sharp global reallocation of financial assets could lead to rapid capital out- flows from the region’s frontier markets,” he said. Ana Lucia Coronel, the senior IMF resident representative in Uganda, revealed the Uganda shilling depreciated more than other currencies in the region by close to 40 per cent. On policy response, she said tightening monetary policy by Bank of Uganda before the rise in inflation was commendable. However, she said the biggest manifestation of risks into Uganda’s economy has been in security, tourism, exports decline, uncertainty about elections and lack of confidence in the economic policies by Ugandans due to what happened in 2011, which has resulted in reduction in economic growth
