Triple crises could reverse gains in Africa: IMF

October 11th, 2008 - 6:35 am ICT by IANS  

Washington, Oct 11 (DPA) Sub-Saharan Africa is facing a spike in inflation and a slowdown in growth over this year and the next as it deals with the triple threats of food and fuel price surges and some spill-over from the financial turmoil, the International Monetary Fund warned Friday.The region is still showing stronger growth than much of the world. Growth will fall to 6 percent in 2008 and 2009, down from 6.5 percent in 2007, according to the IMF’s semi-annual economic report on the region.

High food and fuel costs will increase inflation to 12 percent across the region in 2008 and ease to 10 percent next year, the IMF said.

African finance ministers and central banks heads meeting in Washington Friday warned that the price surges “risk reversing hard won gains” in lowering inflation and tackling poverty across the region, according to a joint statement.

The financial crisis has also indirectly hurt the region by stunting private investment and cutting remittances from abroad. Wealthy nations dealing with their own economic woes are not meeting their promises of aid.

The IMF said it was ready to provide emergency loans to countries struggling with their finances as a result of the crisis.

“While the impact of higher food and oil prices … remains the most important concern for African countries today, the challenge is multifaceted, and a comprehensive approach to the policy response is needed,” the statement said.

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