The Global Crisis and Sub-Saharan Africa Antoinette M. Sayeh Director African Department

2 Key Messages The impact of the global crisis on Africa will be severe The impact of the global crisis on Africa will be severe African countries are better prepared to address this shock than in the past, but all countries will have to adjust to the new external environment African countries are better prepared to address this shock than in the past, but all countries will have to adjust to the new external environment The IMF is providing scaled-up, more flexible support to Africa The IMF is providing scaled-up, more flexible support to Africa

3 African Growth Is Slowing Down

4 How is the crisis affecting Africa? Countries are affected in different ways Countries are affected in different ways Countries most closely integrated with financial market have felt the impact immediately Countries most closely integrated with financial market have felt the impact immediately Impact more gradual but no less severe in countries primarily affected through real channels Impact more gradual but no less severe in countries primarily affected through real channels In all countries, fiscal and balance of payment pressures are mounting In all countries, fiscal and balance of payment pressures are mounting

5 How are African countries responding ? A majority is allowing fiscal deficits to widen A majority is allowing fiscal deficits to widen But limited fiscal space is a constraint in some countries But limited fiscal space is a constraint in some countries Monetary policy has been eased in a number of countries Monetary policy has been eased in a number of countries

6 How is the IMF helping (1)? By strengthening our partnership with Africa By strengthening our partnership with Africa In the joint Dar es Salaam declaration, the IMF and African Finance Ministers committed themselves to a new, enhanced partnership In the joint Dar es Salaam declaration, the IMF and African Finance Ministers committed themselves to a new, enhanced partnership We are already making progress on these commitments We are already making progress on these commitments ongoing reform of our policies in low-income countries ongoing reform of our policies in low-income countries efforts underway to enhance the voice and representation of African countries at the Fund efforts underway to enhance the voice and representation of African countries at the Fund

7 How is the IMF helping (2)? By scaling up our financial support By scaling up our financial support Since mid-2008, commitments to Africa have increased by a third to $2.2 billion Since mid-2008, commitments to Africa have increased by a third to $2.2 billion By making our lending more flexible By making our lending more flexible Fiscal targets have been loosened in a majority of program countries Fiscal targets have been loosened in a majority of program countries Structural conditionality more focused on core areas of IMF competence Structural conditionality more focused on core areas of IMF competence By stepping up our technical assistance effort By stepping up our technical assistance effort Two more regional technical assistance centers in Africa will bring the total to 5 Two more regional technical assistance centers in Africa will bring the total to 5

8 Thank you