The International Monetary Fund (IMF) released the October 2010 Regional Economic Outlook with Sub-Saharan Africa growth projected at 5 percent in 2010 and 5.5 percent in 2011.
The Director of the IMF’s African Department Antoinette Monsio Sayeh commented on the report’s main findings saying the economic outlook is an indicator of economic recovery.
“The latest Regional Economic Outlook highlights the broad-based economic recovery that is now underway in sub-Saharan Africa. Growth of 5 percent is projected in 2010 and 5½ percent in 2011. Should this prevail, economic growth in most countries of the region would have effectively bounced back to close to the high levels registered in the mid-2000s.
In a press statement, Sayeh said that the region’s resilience owes much to sound economic policy implementation before and during the 2007–09 global financial crisis which allowed country authorities to use fiscal and monetary policies nimbly to dampen the adverse effects of the sudden shifts in world trade, prices, and financial flows.
“Domestic demand in the region in 2010 and 2011 is expected to remain strong on the basis of rising real incomes and sustained private and public investment. In addition, exports are expected to benefit from the increased orientation of trade toward fast-growing markets in Asia.
Nevertheless, the global financial crisis has left a legacy of elevated unemployment in some sub-Saharan African countries. Fiscal balances have deteriorated, particularly in the region’s middle-income and oil exporting countries. And because of the fragile nature of the global recovery, risks remain weighted on the downside, an official statement reads.
She suggested that the focus of policy needs to shift toward rebuilding the policy buffers that served so well during the crisis. In particular, expansionary fiscal policies will need to be tempered to make sure that public finances return to a sustainable path and public debt levels remain manageable.
Central Bank governor Francois Kanimba said the country implemented different economic policies like strengthening macro-economic stability, inflation was kept very low and maintained gross foreign reserves high and comfortable at six months of imports.
“Rwanda is among the best performers as commended by development partners with improved public finance management,” kanimba said.
Other drivers of economic recovery include reforms in governance, confidence building and hence efficiency in the private sector.