"We have to presume that the low (commodity) prices will be around
for a long time," IMF First Deputy Managing Director David Lipton told a
news conference at the World Economic Forum on Africa.
Africa told to adjust, diversify amid commodity price slide(Reuters)
African
governments that are struggling with low commodity prices need to
diversify their economies, control spending and raise tax revenues to
make up for lost earnings, the IMF and African Development Bank said on Thursday.
Sub-Saharan
economic growth is likely to slow to 3 percent in 2016, its weakest in
nearly two decades, also hurt by drought and the after-effects of last
year's Ebola outbreak in West Africa, the International Monetary Fund said this month.
"We have to presume that the low (commodity) prices will be around for a long time," IMF First Deputy Managing Director David Lipton told a news conference at the World Economic Forum on Africa.
"It
makes sense for countries to begin to adjust ... which means
controlling spending, finding ways to diversify the economy, finding
ways to raise other forms of government revenue through the tax system," he said in Rwanda's capital Kigali.
Oil
producers including Nigeria, Angola and Gabon have been among the
hardest hit, while mineral exporters such as Zambia and South Africa
have also suffered.
Many African currencies have
tumbled in value. In Nigeria's case, the government has responded by
fixing the dollar rate, a move that has scared off investors. In other
nations, trade deficits have ballooned.
"We’ve
witnessed a number of the countries are facing balance of payment
deficit and some of them are also facing domestic fiscal imbalance," African Development Bank President Akinwumi Adesina said on the sidelines of the conference.
He said it was vital for African nations to establish sources of income that ran counter to the cycle of commodity prices.
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