Africa-Press – Seychelles. The resident representative office of the International Monetary Fund (IMF) in Seychelles has presented the October 2022 Regional Economic Outlook (REO) for Sub-Saharan Africa.
In its report, the IMF says that the Sub-Saharan Africa’s outlook is being shaped by three main global developments: the slowdown in advanced economies and emerging markets; volatile commodity prices; and tighter global financial conditions.
The report adds that given the difficult international environment, macroeconomic imbalances have been on the rise. High inflation has returned for several countries, largely driven by recent increases in food and energy prices and most noticeable for countries with flexible exchange rate regimes. About 40 percent of the countries in the region have now double-digit inflation.
Fiscal positions have deteriorated significantly in the past few years. Also, the composition of public debt has changed. Low-cost, long-term multilateral debt is substituted with higher-cost private funds, including Eurobonds and domestic debt, resulting in rising debt-service costs and higher rollover risks. As a result of the global shocks and rising macroeconomic imbalances, growth this year is expected to slow by more than 1 percentage point to 3.6 percent.
The REO also highlighted that there are three overarching policy objectives: first and foremost, precedence must be given to protecting lives. The current cost-of-living crisis is adding to an already-fragile food security situation. Second, priority must be given to building resilience. This entails rebuilding buffers, insuring economies against risks, strengthening policy frameworks, and improving governance. Lastly, authorities must work on moving away from the edge. High quality growth over the medium term is the most essential ingredient for eliminating macroeconomic imbalances, suggesting that the premium on upfront structural reform is extremely high.
Present at the workshop, which took place on Thursday at the Tender Board office, Maison de Mahé, Victoria, were officials from the Ministry of Finance, National Planning and Trade and from the Central Bank of Seychelles.
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