The IMF(International Monetary Fund) cut its 2016 growth forecast for Sub-Saharan Africa to 1.4 percent, from 3 percent in May, as economies from Nigeria to Zambia reel from the drop in commodity prices.
Abebe Selassie, the Director of IMF’s African Department, said growth could start to recover next year to 3 percent, but only if the battered economies carry out fiscal reforms.
African economic growth was more than 5 percent in the decade leading up to the commodity price drop, but it is now being dragged lower by 23 resource-dependent nations like Nigeria, South Africa and Angola.
Selassie said Nigeria’s low debt was a source of strength, adding officials needed to offer more certainty through a “coherent and consistent policy package”.
Selassie said African Nations needed to balance commercial debt, like Eurobonds, with other cheaper forms of financing from development institutions. Several nations have made debut Eurobond issues in recent years but the pace has slackened off.