IMF Africa Regional Economic Outlook 2010

1. IMF Africa Regional Economic Outlook 2010 Some Discussion Points by Njuguna Ndung’u Governor, Central Bank of Kenya October 25, 2010

2. Overall Thrust of the Report General Agreement with the main findings of the report that Sub Saharan African (SSA) countries growth performance likely to bounce back to pre-crisis level of above 5 percent in 2010/11. SSA Economies withstood this crisis better than previous crises because of better macroeconomic management pre-2008 i.e. steady growth, low inflation, good debt management: Kenya’s case… Future SSA growth (in 2011 and 2012) still contingent on recovery in advanced countries The policies implemented by most SSA countries to mitigate the negative shocks of global financial crisis were the correct ones e.g. Running down the foreign reserves Allowing exchange rate to depreciate to offset the impact of external shocks (automatic stabilizer) Fiscal stimulus to stabilize growth Accommodative monetary policy - lowering policy rates and providing liquidity to banks But above all did not cut development spending – so did not sacrifice long-run capacity for growth But, African countries can be classified as: 1) Coastal Resource Rich 2) Coastal Resource Poor 3) Land-locked Resource Poor 4) Land-locked Resource Rich – Each with different growth experience and resilience. We can parade policy outcome/mapping and perhaps tell the policy/resource story more forcefully.