- Inflationary pressures resulting from global price shocks threaten to derail macroeconomic stability, growth, and efforts to achieve Millennium Development Goals in many sub-Saharan Africa countries. International Monetary Fund (IMF) Managing Director, Dominique Strauss-Kahn has said following the Africa Caucus meeting in Mauritania last week.
He said that in the short term, targeted social safety net measures should be implemented to provide income support to poorest, adding that IMF was ready to help by providing policy advice, technical assistance, and financial support, including through its exogenous shocks facility.
"Indeed, we are already increasing lending under existing arrangements in nearly a dozen countries that have balance of payments needs. We have also urged donors to step up assistance," said Mr Strauss-Kahn.
He said discussions with African Caucus also gave him an opportunity to hear first-hand from leaders in the region how they are facing difficult challenges posed by recent sharp increases in food and fuel prices.
"I also noted to the Governors that over the longer term, the best way to respond to the food and fuel crisis is to increase food supply, conserve energy, and develop new energy sources," he said, adding this would require increased investments in infrastructure, particularly in power and agriculture sectors.
The meeting which also focused on increased investments in energy and food production, was also attended by heads of China Development Bank, Islamic Development Bank, and World Bank.
IMF Managing Director emphasised to the caucus that to be productive, such investment must be accompanied by sustainable macroeconomic policies and good systems of expenditure control and project management, and financed in a cost effective way.
He further reminded that mobilising private sector investment, and securing grants or highly concessional financing, would be of importance to realizing desired results.
While in Mauritania, Mr Strauss-Kahn also had bilateral meetings with president Sidi Mohamed Ould Cheikh Abdallahi, and other senior Mauritanian government officials, including prime minister Yahya Ould Ahmed El Waghef, and Governor Kane, to whom he reiterated IMF's strong support for the authorities' emergency food security programme while he also commended comprehensive and proactive stance Mauritania had taken to address this critical issue.
He however encouraged Mauritanian government to closely monitor food security situation and further expand domestic production, while at the same time maintaining on significant progress country has made in implementing an ambitious programme of economic reform.
IMF supports Mauritanian reform efforts under a Poverty Reduction and Growth Facility (PRGF) program, which aims to speed up economic growth, reduce unemployment and raise the standard of living for the Mauritanian people.
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