By: Lloyd Evans
Maputo, Mozambique
The Managing Director of the
International Monetary Fund (IMF) Madam Christine Lagarde has expressed her
disgust of the level of corruption currently going on in most African
countries.
She said in
some countries in Africa, the rents and revenue
from extractive industries are captured by just a few depriving the rest
of their people the needed standard of living.
The
Managing Director declared “Mining can account
for an important share of output and export earnings, but often contributes
relatively little to budget revenues and job creation. This corrodes the fabric
of the economy and its social cohesion”
Madam
Lagarde was speaking at an international conference on Africa in Maputo,
Mozambique. The high level conference was on the theme “Africa Rising: Building
to the Future”.
The
two-day conference brought together
finance ministers, policymakers, the private sector, and civil society from
sub-Saharan Africa and beyond to discuss the challenges facing the region as it
builds upon the strong economic gains made since the 2008 global economic
crisis. Ghana was represented bt Mr Seth Terkper Minister for Finance and
officials from the Bank of Ghana.
To halt the level of corruption in
Africa, Madam Lagarde called for the
strengthening of institutions and governance frameworks that manage these
resources and pointed out that transparency can help increase
accountability—and help ensure that these resources are harnessed for the
benefit of all.
She said some countries have taken steps
in this direction and cited Sierra Leone and Uganda for setting new fiscal
rules in anticipation of large resource flows.
She said Côte d’Ivoire has also
implemented a new legal framework for the mining sector that would help attract
higher foreign direct investment.
Touching on capacity building, she said ,
“Africa’s greatest potential is its people. They are the key for the region to
fully capture the dividends from population growth. By some estimates, a one
percentage point increase in the working age population can boost GDP growth by
0.5 percentage points”.
For this to happen Madam Lagarde said,
“good jobs need to be created in the private sector. Today, only one in five
people in Africa finds work in the formal sector. This must change. With wider
access to quality education, healthcare and infrastructure services need to be
improved”.
Similarly, technology can be tapped to
extend the reach and access of financial services to millions of people. Here,
Kenya’s experience offers valuable lessons to the rest of the world on how to
empower the poor through financial access, she stated.
She said by combining mobile banking
with financial services provision, 75 percent of Kenya’s population now has
access to financial services. Crucially, it is the poor that have benefited the
most from this expansion.
On gender issues Madam Lagarde said “most of the women in Africa cannot afford not to work. But when they do, they are
mostly employed in informal activities. We all know what this means: low
productivity, low incomes, low prospects. We also know the constraints: access
to education, credit, and markets”.
The gains to be made by overcoming these
constraints are immense—particularly through girls’ education. By some
estimates, the economic loss in developing countries from the education gap
between girls and boys could be as high as $90 billion a year—almost as much as
the infrastructure gap for the whole of Sub-Saharan Africa, she stated.
She said
“the opportunities are vast and
the challenges, while significant, can be overcome through sustained strong
policies, both economic and social.
“Now is the time to go further—to work
together towards an inclusive, job-rich and sustainable growth strategy. Now is
the time to extend the gains that many countries have enjoyed to those that
have been left behind by helping them overcome fragility and build strong
institutions”
The writer is the former Editor of
Graphic Business
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