Africa’s economies are showing stellar growth but these must be matched by efforts to tackle poverty, a member of the International Monetary Fund warned Monday in the Mozambique capital, Maputo.
The sub-Saharan African economy is expected to grow 5.4 percent this year, and Africa is beginning to deliver on its economic potential, IMF Deputy Managing Director David Lipton said.
“Africa is changing and the world is noticing,” Lipton told an audience, but he warned against complacency with Africa’s current success.
Poverty may have come down in places such as Mozambique but it remains high, he said.
“Sub-Saharan Africa has made the least progress toward the ( United Nations) Millennium Development Goals and still lags (behind) other regions on measures such as primary education and maternal mortality,” Lipton said.
The eight Millennium Development Goals range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education by 2015, according to the U.N. The goals form a blueprint agreed to by all the world’s countries and leading development institutions.
African countries remain exposed to commodity price changes and “fickle” capital flow, Lipton said.
Africa’s share of global foreign direct investment increased from 3.2 percent in 2007 to 5.6 percent in 2012, according to Ernst & Young.
More good news is expected, but African countries should also be prepared for some shocks, Lipton warned.
He called for rational government spending, ditching policies that don’t work, replacing costly energy subsidies and broadening the tax base. He encouraged sub-Saharan nations to begin rebuilding their reserves to guard against adversity.
He also said the region needs to further engagement with the global economy.