IMF warns over threat of external headwinds on Sub-Saharan Africa

IMF warning comes as South Africa is grappling with measures to raise revenue

- SIPHELELE DLUDLA

THE International Monetary Fund (IMF) has warned that the spectre of escalating trade tensions, combined with rising financial costs in developed economies, will complicate the economic landscape for sub-Saharan Africa.

IMF director of the African Department, Abebe Selassie, said on Friday the sentiment surrounding sub-Saharan Africa was cautiously optimistic six months ago, marked by the region's gradual recovery from the economic repercussions of past global upheavals.

However, Selassie said a new wave of global policy uncertainty has emerged, posing serious threats to this fragile recovery just as policymakers began to see the fruits of their hard work.

He said recent forecasts projected regional growth at a robust rate exceeding expectations, particularly for 2024 but external forces have made their presence felt just as some stability began to materialise.

“Any further increase in trade tensions or tightening of financial conditions in advanced economies could further dampen regional confidence, raise borrowing costs, and delay investment,” Selassie said.