What is the economic outlook for the region in 2015, and what are the risks?

We expect sub-Saharan Africa to register a growth of 4.7 per cent, accelerating to 5.2 per cent in 2016.

The risks include the slow growth environment in advanced economies particularly the Euro area and Japan; the potential volatility and financial disruption as a result of monetary policies operating at different places in the cycle; geopolitical risks and any others that suddenly hit the globe.

For example, a year and half ago, we never talked about Ebola because it wasn’t an issue. Now it has affected countries in West Africa.

There are concerns about debt with the International Monetary Fund. Kenya, for instance, has been borrowing from the IMF. What are the long-term solutions to foreign exchange support loans for African countries?

Kenya asked for a precautionary loan — it is a progression that we observe concerning Kenya and one that is moving in the right direction because it is an indication that the country is more solid economically. A country such as Kenya, depending on how the oil market pans out, could find itself with a good balance of trade and improve its balance of payments.

Given that domestic resources in the region remain meagre, how can countries avoid accumulating high debt while addressing infrastructure gaps?

The critical choice hinges on what infrastructure projects are prioritised and how they will provide a return that helps the country financially so that it is on a stronger footing to bear the burden of additional debt.

It also hinges on the right choice of debt mix — such as going for concessional debt inasmuch as it is possible, and involving the private sector under public-private partnerships before any other debt is envisaged.

One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy. What can be done about it?

IMF research — which looked at 173 countries over the past 50 years — found that more unequal countries tend to have lower and less durable economic growth.

We found that, in general, fiscal policies have a good record of reducing social disparities. For example, transfers and income taxes have been able to reduce inequality by about a third on average in advanced economies.

But it is a complex issue and policy choices need to be made carefully. Potentially beneficial options include making income tax systems more progressive without being excessive; making greater use of property taxes; expanding access to education and health; and relying more on active labour market programmes and in-work social benefits.

The EAC is aggressively pursuing a monetary union. What should be prioritised in this process?

It is hard to know what will work and what will not work. But going slowly and decisively at the same time is very important. You can be decisive while not rushing in that direction. Moving decisively and slowly is a good approach.

Secondly, doing things step by step and not putting the monetary union ahead of other unions is the right choice. For instance, having an economic union first, fiscal union, banking union then moving into a complete union is a wise approach.

In the process of regional integration, how can small countries like Rwanda and Burundi be equal players?

The ability to be able to move fast is something that small countries should develop when they cooperate with big players. At the same time, they should cooperate on purpose — removing the barriers, reducing the obstacles in terms of immigration controls gives access to a much bigger market. The impact is much bigger for a small country than it is for a bigger one.

Trade is a big avenue that can benefit a small country — it needs to be developed.

Some cross-border projects, particularly in the field of infrastructure such as hydropower dams, can be developed as a cross-border process in order to ensure that all countries benefit.

The IMF (approved on December 25) revised its debt policy for developing countries — what are the implications of the new debt policy?

The debt limit is no longer set as a factor of a country’s development level but as a factor of its fiscal policy situation as well as its current debt situation. By doing this, we are trying to avoid the bias against low income countries and are also responding to the country’s needs and its current projects.

What would the IMF recommend in terms of public investment in order to better integrate the economies of the region?

From the stability point of view, the region needs investments in infrastructure that is beneficial to the whole region. These should be prioritised, particularly in energy and cross-border transportation.

Significant investments in these areas plus the removal of barriers, the acceleration of transportation, elimination of red tape and non-tariff barriers. Improving Customs procedures will improve the competitiveness of the region.

Investments in skills and training as well as improving the quality of manpower in the sectors of the future are also wise choices.