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IMF urges budget caution in Africa

By on April 19, 2011

The International Monetary Fund (IMF) is cautioning African countries to watch their spending during a year packed with elections in the region where rising food and fuel prices already pose a big threat to the poor.

This year is the busiest for the African political calendar since the end of the Cold War, with 17 presidential polls and even more parliamentary and local elections.

The hectic schedule is raising concerns that countries could throw fiscal caution aside to win votes and undermine years of economic progress, pumping up growth and possibly raising wages that would further fuel inflationary pressures.

“There are some hard decisions that governments will need to take this year and those are even harder in a political season, but we want to encourage countries to pursue reforms as much as they can,”

Antoinette Sayeh, IMF Director for Africa, told Reuters during weekend meetings of global finance chiefs.

Djibouti, Chad, Seychelles, Cape Verde, Sao Tome and Principe, Uganda, Benin, Niger and Central African Republic are among African countries going to polls in 2011. Nigeria held a presidential election on Saturday.

In 2009, overspending by Ghana’s former government in the run-up to elections forced the West African state to turn to the IMF for a $1 billion loan. Ghana faces presidential primaries in July before a vote in December 2012.

Source : Tribune