The Governor of the Bank of Botswana, Ms. Linah Mohohlo, and the Deputy Managing Director of the International Monetary Fund, Mr. Min Zhu, hosted today in Gaborone, Botswana, a regional conference entitled “Small Middle-Income Countries in Sub-Saharan Africa—Raising the Bar” . Delegates included senior officials from a number of countries representatives of the private sector, academia, the Executive Board of the IMF and IMF staff. At the end of the conference, the following statement was issued:
“We had a very productive set of discussions on the economic outlook and policy challenges facing small middle-income countries (SMICs) in sub-Saharan Africa. This group of countries has made significant progress in terms of maintaining macroeconomic stability and sustaining high growth over the past two decades. However, a number of challenges have recently emerged and, beyond the importance of maintaining their hard earned gains in terms of economic stability, there is scope to rethink their growth strategies and move forward with bold complementary reforms that could facilitate their transition to high-income status.
“For countries that depend heavily on commodity exports, the near-term environment has deteriorated as both global demand and prices have declined. And while some countries have previously built savings that can help them cushion the slowdown, other countries have seen their fiscal positions deteriorate rapidly at a time when external financing conditions have tightened. Notably, the slowdown of the South African economy could also adversely affect the countries in the region.
“Participants concluded that, beyond following prudent policies that will help preserve economic stability (a precondition for growth), SMICs should not lose sight of the need to build resilience, adopt more inclusive policies, and foster economic diversification. To this end, reforms should be comprehensive, yet carefully prioritized to unlock these countries’ productivity growth. In particular, countries should focus on investment projects that generate wide benefits to other sectors of the economy in priority areas (e.g., energy infrastructure) and rationalizing regulations that hinder the development of the private sector, while adopting a “smart” growth strategy that could take advantage of and/or adequately address global megatrends in technology, climate change, and demographics.
“Participants also agreed that, for countries to succeed, growth will have to be inclusive in terms of job creation and, in a number of cases, ensure policies that protect the most vulnerable segments of society. This will likely require courageous reforms to reduce skills mismatches in the labor force through cost-effective training programs, adopting reforms that can lower the cost of doing business and facilitate the hiring of highly-skilled workers, and enhancing the composition and efficiency of government spending.”
Ms. Mohohlo noted that: “This conference has touched on various policy challenges that SMICs have in common—on the one hand ensuring economic stability and sustaining growth while promoting inclusion and social equity, and on the other hand recalibrating the growth strategy to facilitate the transition to high-income status. We had an excellent opportunity to discuss the lessons and prospects of policies being implemented in several SMICs as well as on other countries that successfully tackled their developmental challenges and have now well-functioning and developed markets. The wide forum in which the conference took place and the related peer-to-peer learning strengthened the dialogue among SMICs and offered novel views on how to tackle these countries’ challenges.”
In closing, Mr. Zhu said “The IMF remains closely engaged with SMICs in Sub-Saharan Africa through policy dialogue, technical assistance, and analytical work. The conference has also served as the launch of the book Africa on the Move: Unlocking the Potential of Small-Middle Income Countries, authored by IMF staff in collaboration with officials from SMICs in the region. Looking ahead, our teams will continue to collaborate closely with country authorities as they strengthen the analytical underpinnings of their policies and rethink their growth strategies. We look forward to continuing this dialogue at the time of the IMF Spring Meetings in April.”
The Small Middle-Income Countries in Sub-Saharan Africa comprise Botswana, Cabo Verde, Lesotho, Mauritius, Namibia, Seychelles and Swaziland.
Source: International Monetary Fund (IMF)