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"African Nations in Tight Squeeze" - IMF


FILE: International Monetary Fund logo is seen outside the headquarters building. Taken 4.20.2018
FILE: International Monetary Fund logo is seen outside the headquarters building. Taken 4.20.2018

In a new report, the International Monetary Fund (IMF) said African governments face an "extremely challenging" environment in macro-economic policy.

African countries have to walk the tightrope as they contemplate economic reform at a time of worsening hunger and climate change, the IMF said on Thursday.

"Addressing the lack of resilience to climate change (and) critically underlying chronic food insecurity... will require careful policy prioritization against a backdrop of financing and capacity constraints," it said.

At least 123 million people, or 12 percent of sub-Saharan Africa's population, are projected to be acutely food insecure, it said.

The impact on economies from the Covid-19 pandemic has combined with a surge in grain prices fueled by the Ukraine War, it said.

At the same time, East Africa is suffering from one of the worst droughts in recent history.

Despite these problems, some liberalizing reforms in trade, regulations and markets are feasible, the IMF said.

"Trade liberalization and import diversification could help stabilize regional food supply and prices," the fund suggested.

It pointed to a ban that Zambia imposed on exports of its corn in 2020. If some of the harvest had been available, it could have helped with southern Africa's food shortfall.

The IMF renewed a pledge to back African countries needing technical assistance and financial support.

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