GLOBAL ECONOMY TO CONSOLIDATE RECOVERY - IMF
BY PROVIDENCE OBUH
The global economy is expected to consolidate on its recovery from the global economic meltdown says International Monetary Fund (IMF) Deputy Director, African Department Mr.Saul Lizondo said this during the launch of IMF's Semi-Annual Sub-Saharan African Regional Economic Outlook held in Lagos.
Lizondo said Sub-Saharan African's recovery from the crisis-induced slowdown is well under way, with growth in most countries now back fairly close to the high levels of the mid-2000s.
According to him, 'the main recovery remains multi speed six and half per cent growth in emerging market and two and half per cent growth in AE; four and half per cent global growth'.
He explained that evidence of the recovery is borne out by high frequency data, noting that after an inventory acceleration-slowdown cycle activity seems poised to re-accelerate in 2011.
Abebe Selassie, Regional Studies Division chief added that the severity of the shock imparted by the financial crisis and the global recession that followed, after a brief hiatus, output expansion in most countries in sub-Saharan Africa has returned to the high precrisis levels.
Selassie said 'with the advent of another sharp increase in food and fuel prices, the resilience exhibited by the region during the last few years is about to be tested again. The price shocks (coupled with the recovery) are likely to lead to higher inflation in most countries and to deteriorating current account deficits in a number of fuel importers'.
Permanent Secretary, Federal Ministry of Finance, Mr. Danladi Kifasi assuredly said the Nigerian economy and that of the sub-Saharan region will continue to be strong and resilient.
Kifasi, who represented the Minister of Finance Mr. Olusegun Aganga said 'the policies we are implementing are targeted at ensuring the sustainability of that growth as well as building it on a strong and diversified foundation.'
Speaking on Nigeria's revenue base, he disclosed plans by Government to diversify revenue base away from oil and gas by broadening the tax base adding that the Government is determined to bring the budget back to balance through the enhancement of revenues and by increasing the efficiency of its expenditure.
He said, 'we will achieve this by modernizing and improving the efficiency of tax framework' IMF, in a statement 'the overall sanguine picture must be judged alongside still lingering dislocations from the global financial crisis. The region' progress toward the poverty reduction Millennium Development Goals has been delayed by rising unemployment and the impact of the 2008 spike in food and fuel prices'
'With strong growth and rising inflation pressures, the broad direction of fiscal policy in most countries should be moving away from the supportive stance of the last few years. Nevertheless, fiscal support to poor households hit by rising food prices will need to be accommodated in some countries'.
IMF statement stated that monetary policy remains looser than desirable in many low income countries in the region, even before the recent surge in food and fuel prices. 'To counter incipient inflationary pressures, monetary policy will need to be tightened, particularly where growth has already regained pre-crisis level' it added.