The International Monetary Fund has asked sub-Saharan African countries to make the most of new financing instruments and flows in addressing the infrastructural deficit in the area.
The IMF said in its latest Regional Economic Outlook for sub-Saharan Africa, that major barrier to addressing the continent’s infrastructure deficit does not generally appear to be a lack of financing, but rather capacity constraints in developing and implementing projects.
The Washington-based fund said, more specifically, countries should fortify their public financial management capacity by upgrading their methods to plan, implement, and monitor public investment, strengthening their project appraisal procedures, and adopting a medium-term budgetary framework that includes ample provisions for the cost of operation and maintenance.
Public-private partnerships can be an effective tool to upgrade infrastructure, but needs to be underpinned by a suitable institutional and legal framework, and to be cautiously monitored to reduce fiscal risks, it said.
The study finds that many countries in the region have sustained a high level of public investment, but only some of them have managed to improve their infrastructure significantly.
The Director of the IMF’s African Department, Ms. Antoinette Sayeh said the strong development trends of recent years in the sub-Saharan African county are expected to continue. The region’s economy is forecast to continue growing at a fast clip, increasing by about 5 per cent in 2014, the same level as in 2013, and accelerating to around 5¾ per cent in 2014, underpinned by continued public investment in infrastructure, buoyant services sectors, and strong agricultural production, said “This positive picture, however, coexists with the dire situation in Guinea, Liberia, and Sierra Leone, where, beyond the unbearable number of deaths, suffering, and social dislocation, the Ebola outbreak is exacting a heavy economic toll, with economic spillovers starting to materialise in some neighbouring countries’’.
The IMF said it was vital for the countries to pay attention to macroeconomic constraints, avoid over-reliance on volatile capital flows and prevent the widening of macroeconomic imbalances of a permanent nature.