IMF has urged Africa to refrain from heavily depending on borrowing to fuel economic growth but instead find alternative means. Speaking during an exclusive interview, the Deputy Director for Africa Catherine Pattillo warned that rising debt across African nations, undermines the continent’s economic potential.
According to her, excessive reliance on debt-funded infrastructure across the continent, sinks economic growth for African nations stressing on the need for new financial instruments and domestic credit rating agencies to lower borrowing costs.
Pattillo also emphasized gold as a credible reserve asset for central banks seeking diversification amid global shocks, pointing out to Africa’s chronic underinvestment in health, education, and logistics-sectors vital for improving productivity and competitiveness.
Pattillo further advised governments to re-examine their fiscal policies and broaden tax bases rather than pursuing unsustainable borrowing, considering the global financial tightening which reduces capital flows.
The IMF supports reforms for more transparent project evaluation, stronger debt management, and local capital market development to fund growth.
Related to the interview, the World Bank has reiterated that job creation is the most effective tool to reduce poverty and drive shared prosperity, especially in developing regions.
With 1.2 billion young people set to enter the workforce globally in the next decade, yet only 420 million jobs projected, the Bank warns of a looming employment crisis unless action is scaled up. Since 2019, its interventions have supported 77 million people in accessing jobs, with new strategies now focusing on building resilient labor markets, especially for women and youth.
