Economic Reforms: IMF cautions vulnerable Africa

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The International Monetary Fund has cautioned African countries as they contemplate economic reform at a time of worsening hunger and climate change.

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

“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 stated.

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 fuelled 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 liberalising 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.

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