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Sale of NBK, political reforms top on agenda of IMF mission
International Monetary Fund Managing Director Dominique Strauss-Kahn during a debate at the University of Nairobi. Photo/HEZRON NJOROGE
Posted Monday, March 15 2010 at 00:00
The money, Mr Lipsky said, boosted most members’ gross international reserves well above comfortable levels.
Speaking in Dar last year, Mr Strauss-Kahn said he would ensure Africa was not forgotten at a time when world attention was focused on the Western economies and their outsize stimulus packages and deficits.
“The IMF is an implicit authority for many credit departments, and by giving Africa good visibility it certainly oiled the wheels,” Nairobi-based Rich Management chief executive Aly Khan Satchu told The EastAfrican.
Mr Satchu said the recent move by IMF to address Africa’s problems is a radical departure from its approach in the 1990s.
“That was a time when the IMF was seen as the enforcer of US capitalism. This has clearly changed. In the absolute scale, I think the IMF’s participation in Africa has probably held stead,” he said.
In helping foster a return to balanced global growth, the Fund is proposing that African countries to have a “clear voice” in international financial institutions. In this regard, it is working to reform its own governance, in part “so that our members in Africa and other countries have a larger say in what the IMF does.”
Senior Africa strategist at South Africa-based Global Markets Research Phumelele Mbiyo, however, says there has been a concerted effort to improve financial deepening, measures that will eventually improve monetary policy implementation and help to improve financial market functioning.
“The global economic and financial crisis almost thrust some advanced economies into a deflationary spiral. Global interest rates have declined all along the yield curve, private final demand has slumped and only aggressive monetary and fiscal policy responses prevented a deflationary spiral from ensuing. Given the advances that some African governments have made since the early 1990s, it was worthwhile for the IMF to provide temporary assistance to these governments provided that they maintained prudent policies. The expectation is that as global economic activity picks up these African countries will be able to rein in the recent fiscal deficits that emerged, returning them onto the same trajectory they were on before the crisis hit,” Mr Mbiyo told The EastAfrican.
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