Editorial: Cameroonians choking, IMF hailing economic management!.

The report indicates that in the 2025 financial year, the growth rate will witness a significant peak to settle at 4.2%. The African Development Bank, AfDB, in its own report, projected a better growth of 3.7 percent in 2024 and 4.3 percent in 2025.

But at the launching of the IMF report, presided over by the Minister of Finance, Louis Paul Motaze, alongside representatives of the IMF, donor partners and representatives of the diplomatic community in Yaounde last Friday, there was a warning.

Experts, however, foresaw a stagnation setting in, if governments do not live up to what is expected of them in terms of implementing major reforms. The previewers noted that despite the Subregional averages given above, there were noticeable differences in growth rates, between countries that were rich in natural resources and those that were not. Just as there were similar disparities between countries like Cameroon, which economies were significantly diversified as against those that were heavily dependent on the export of one major commodity, like the oil rich nations.

The IMF warned that for many decades to come, Sub-Saharan Africa will continue to serve as the principal source of raw materials to run western industries and economies and that Sub-Saharan Africa will remain a fertile ground for technology transfer and the creation of wealth.

For the growth to be experienced with a feel-good effect, the IMF recommended improving human capacities so as to make Africans more competitive in the global marketplace, cleaning up the business climate, consolidating budgetary stability, improving transparency in public spending, empowering the private sector and fostering regional integration.

Even with those recommendations and a positive growth data, the African Development Bank, in its own assessment of the 2024 Economic Outlook, noted that "despite strong economic performance and remarkable resilience, structural transformation in Africa has been slow and uneven…addressing this will require calling bold reforms of the global financial architecture to meet Africa’s development financing needs".

It points out that African countries continue to contend with significant structural challenges and multiple severe shocks, including heightened food and energy prices, driven by geopolitical tensions such as Russia's invasion of Ukraine, climate issues affecting agriculture and energy production, and persistent political instability.

"This challenging environment has led to a slowdown in Africa's real GDP growth, which dropped to 3.1 percent in 2023 from 4.1 percent in 2022," AfDB noted. 

That, it added, will be underpinned by expected improvements in global economic conditions and effective policy measures. With these outturns, Africa will remain the second-fastest growing continent globally, with 40 countries set to achieve post higher growth rates relative to 2023 levels.

The positive trends notwithstanding, AfDB said: "Africa still faces challenges in achieving sustainable economic and social transformation. Historical growth rates have been insufficient to offset population increases, leading to minimal gains in per capita GDP. Structural transformation has been limited, with economies heavily reliant on traditional, low-productivity sectors like agriculture or low-skilled services for growth and employment".

The African Development Bank recommended that to achieve substantial structural transformation, "Africa needs to focus on strategic investments in key Sustainable Development Goal areas such as education, energy, productivity-enhancing technology and innovation, and productive transport infrastructure”.

"The financing gap for these investments is vast, estimated at about US$402 billion annually, until 2030, and will require scaling up domestic resource mobilisation and fostering private sector investment," it added. 

According to economic experts, given the enormity of resources, scaling up external financial flows as complementary sources of financing is crucial. In that respect, the African Development Bank underscores the "urgency to reform the global financial architecture to facilitate fair, sustainable, and inclusive resource allocation, essential for financing Africa's development goals".

Experts contend that the IMF is reluctant to reform the global financial architecture that will weaken the US dollar and its global economic influence. But without the reforms, countries like Cameroon using the FCFA will continue to rely on the dictates of the IMF even to their national economic peril as growth projections are dangled while the masses continue to feel the pinch of skyrocketing inflation and cost of living.

This article was first published in The Guardian Post Edition No:3295 of Tuesday November 19, 2024