Tuesday, September 20, 2011

IMF cuts Africa's growth projections




The slow down in the US and Europe may be responsible for a slower economic growth for Sub- saharan Africa.

Some African countries are already reeling from the effects of these, that are visible through weaker currencies and reduced investor participation.

In 2008, as the economic crisis sunk several economies, Kenya was one of the economies that remained resilient, hinging its survival on thin intergration levels with the developed world.

But that was then, the second phase of may not leave Africa unscathed. the IMF has cut down its growth projection of Africa to 5.2% from 5.5% projected in April.

so what are the implications of this?

With its track record and strong critics about the IMF's role in Africa's development,Some may dismiss this - but unfortunately investors and the world's super powers who dictate the global economy listen to these financial institutions. If the growth rate is cut, investors read this as a signal to reduced returns.

It is true, that the world is a global village, just ask an apple farmer who now sells one apple at 30 shillings, up from 20 shillings last week.His profit is not 10 shillings per fruit. Ask him why.

2 comments:

  1. I have disagreed with various IMF Policies especially those delegated to World Bank.However, always agreed with their economic projections. It does not require a genius to tell that, with the prevailing circumstances of inflation, drought in the horn of Africa,unemployment among other aspects, growth will be curtailed. By Kevin Murungi

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  2. Thanks Murungi- I earlier posted a blog on IMF and its Impact in Africa's development (or lack of thereof) and mentioned Kenya's 'lost decade" which some say was occasioned by IMF & World Bank conditionalities that set off a different set of priority areas- the result of which was an economy with no social safety nets- especially in health and education.

    Some dismiss the IMF as a group of technocracts and theorists sitting in Washington and making decisions about an Africa they know nothing about.

    And while the critics have their space, and the IMF and Worldbank have severally failed- they also have succeded many times, and cannot be ignored in matters of the the global economy.

    Thanks for dropping by, and I hope you'll come again. Thanks.

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