Africa a Continent of Opportunities, Yet Many Troubles Says IMF

• Africa a Continent of Opportunities, Yet Many Troubles Says IMF

The International Monetary Fund has described Africa as a continent of many opportunities yet several issues, Kristalina Georgieva, the Managing Director, IMF, stated.

According to her, despite the continent opportunities, 40 percent of African nations are in debt distress.

“Africa is a continent of opportunities and what we are looking for is for this opportunity to be harnessed to the maximum. It is also a continent with many troubles; so, we have to be mindful of these risks especially security risks,” she said.

The Managing Director said the IMF is working on helping African nations build sound macro-economic policies and improve investment climate.

Speaking on the debt level, the newly appointed Managing Director said: “Are we worried about debt levels in Africa? Yes, because 40 percent of the countries have gone into debt distress levels.

“In some cases, we are concerned about that but in other cases, we see that investment is going to pay off over time.

“Take the case of Kenya, we advise Kenya to be more cautious in building debt but we have seen good macroeconomic policy in Kenya.

“In cases where debt is dangerous like Zambia, we do say you need to get a handle on your debt. In Ethiopia, we say you need to renegotiate some of your debts because it is non-concessional for things that should be on a concessional basis.

“One has to remember that debt on its own is not bad. It is bad when it goes with the wrong things and when it goes with the speed that the economy cannot handle.”

She added that nations that were experiencing strong growth had done so by borrowing for investments, creating an enabling business environment for investors and formulating sound economic policy.

Georgieva said the Fund would be meeting with leaders from the continent in December to discuss debt sustainability.