International Monetary Fund (Washington, DC)

9 January 2014

Mali at the Dawn of the New Year: From Crisis to Recovery

(Page 2 of 5)

  • The global economic environment;
  • The outlook for Sub-Saharan Africa; and
  • Finally, the policy agenda that will enable Mali to seize the opportunity to create strong, sustainable and inclusive growth.

1. Global Economic Environment

First, the global economic environment. Our revised forecasts on the global outlook will be released in a few weeks, so I will not be discussing numbers, but only trends..
Five years after the financial crisis, the world economy is gradually on the mend. But the recovery is uneven and subdued, and its underlying dynamics are shifting.
Driven by robust private sector activity, growth in the United States is gaining ground, implying an eventual normalization in financial conditions. In Japan, there have been important steps to stimulate growth. And Europe is slowly emerging from a deep recession, though important challenges remain to be addressed.

At the same time, emerging market economies are slowing, following several years in which they were the main engine of global growth. As financial conditions in advanced economies normalize, the risk of heightened volatility in financial markets may create new challenges in emerging market economies and further slowdown their growth. There is also the risk of potential spillovers to countries in Sub-Saharan Africa, particularly those that are more financially integrated with the global economy (including from higher commodity prices and foreign direct investment flows).

2. Outlook for Sub-Saharan Africa

Which brings me to my second point: the outlook for Sub-Saharan Africa. Here the news is encouraging.

In fact, Sub-Saharan Africa has been the second-fastest-growing region in the world in recent years, just after Asia. In many countries, this growth has contributed to higher living standards and faster poverty reduction. Low inflation, reduced levels of public debt, and adequate foreign exchange reserve levels – have shielded much of the region from the global financial crisis.

The improvement is particularly significant in Mali's neighborhood. Thanks to the recovery in Côte d'Ivoire, which has been working hard to recover the ground lost after years of civil strife, the West African Union (WAEMU) has been one of the fastest growing regions in Africa. This is an obvious benefit for Mali—since part of your exports and imports are with your neighbors.

Overall, we expect Sub-Saharan Africa to enjoy continued robust growth—which our projections in October place at 5 percent in 2013 and close to 6 percent in 2014. But this outlook is not without risks. Policymakers should remain vigilant to threats from slower demand in emerging market economies, unfavorable changes in commodity prices, or higher financing costs.

We will have the opportunity to revisit some of these issues in depth in May when we hold a conference in partnership with the Government of Mozambique to which all Sub-Saharan Africa countries have been invited—including your Minister of Economy and Finance. Appropriately titled "Africa Rising", the conference will take stock of Africa's economic successes, as well as the challenges going forward.

3. Unlocking Mali's Potential

Let me now turn to my third topic and the main issue for today's meeting—unlocking Mali's potential.

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