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Surging African economies must tackle poverty

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(Globalpost/GlobalPost)

Stellar growth in Africa's economies must be matched by efforts to tackle poverty and protect against less rosy times ahead, the IMF's number two warned Monday.

IMF deputy managing director David Lipton said "Africa is beginning to deliver on its economic potential," with sub-Saharan Africa overall expected to grow at 5.4 percent this year.

"Africa is changing and the world is noticing," Lipton told an audience in Mozambique's capital Maputo.

But, he warned, "there can be no complacency about Africa's current success."

"Poverty rates remain high - even where they have come down, such as here in Mozambique," he added.

"Sub-Saharan Africa has made the least progress toward the (United Nations) Millennium Development Goals and still lags (behind) other regions on measures such as primary education and maternal mortality."

Lipton warned that countries remain exposed to changes in commodity prices and "fickle" capital flows.

According to the latest figures from professional services firm Ernst & Young, Africa's share of global foreign direct investment increased from 3.2 percent in 2007 to 5.6 percent last year.

More capital flows are expected. But Lipton warned African nations also to prepare for shocks.

He urged "sub-Saharan Africa's countries (to) start rebuilding their reserves to guard against potentially adverse developments."

He also called for rational government spending, ditching policies that do not work, replacing costly energy subsidies and broadening the tax base.

"The region also needs to deepen its engagement with the global economy."

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http://www.globalpost.com/dispatch/news/afp/130506/surging-african-economies-must-tackle-poverty