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Hilbroy Advisory: Saharan Africa needs tighter monetary policy -IMF
Hilbroy Advisory: Saharan Africa needs tighter monetary policy -IMF
The International Monetary Fund (IMF) reiterated its forecast of 5.5 percent GDP growth for the region this year and 5.9 percent in 2012, with low-income countries that make up the bulk of the continent recovering the fastest.
Montreal,
Quebec,
Canada
(prbd.net)
04/05/2011
Montreal, Quebec, May 3rd, 2011– Hilbroy Advisory Inc. (DeutcheBörse: 2H0) Hilbroy Advisory Reports: Economic growth in sub-Saharan Africa has largely returned to pre-financial crisis levels but monetary tightening has failed to keep pace, with rising fuel and food prices a growing threat.
The International Monetary Fund (IMF) reiterated its forecast of 5.5 percent GDP growth for the region this year and 5.9 percent in 2012, with low-income countries that make up the bulk of the continent recovering the fastest.
"Sub-Saharan Africa's recovery from the crisis-induced slowdown is well under way, with growth in most countries now back fairly close to the high levels of the mid 2000s," the IMF said in its latest regional economic outlook.
"Monetary policy remains looser than desirable in many countries in the region ... Interest rates have failed to keep pace with the cyclical recovery, and policy now needs to move ahead of the curve," it said.
Growth forecasts varied, with the poorest countries recovering the fastest -- such as Ethiopia, forecast to grow 8.5 percent this year -- and middle-income countries lagging behind. South Africa is expected to grow just 3.5 percent.
The report assumed an average oil price of $107 per barrel for this year compared to $80 per barrel in 2010, an increase of more than a third which would result in higher import bills for most countries in the region.
In particular, simulations suggest that if oil prices were to increase to an average of $150 per barrel in 2011, growth in oil importing sub-Saharan African countries would decline by 0.5-0.7 percent.
FOREIGN INVESTMENT
The private capital inflows had not yet returned to pre-crisis levels in all areas with some countries -- in particular Ghana and Mauritius -- seeing a marked increase last year but others seeing little sign of a resumption.
Increased investor inflows into Ghana had partly been triggered by a tightening of fiscal and monetary policy in 2009 and 2010, the strong performance of its cocoa and gold sectors and the start of oil production last December. There had also been a rise in portfolio equity investment in Zimbabwe following a 2009 economic stabilization programme.
It was a different picture in Nigeria, where $3.6 billion of portfolio investment left the country in 2008-09 compared to a net inflow of $2 billion in the previous two years, although inflows had since started to recover. Debt portfolio inflows recovered more slowly due to sharply lower domestic interest rates than in the period before the financial crisis, with government debt yields mirroring policy rates.
The IMF noted that high levels of foreign inflows into relatively small economies had posed challenges for policy in several countries before the crisis and again when investors pulled out, increasing exchange rate volatility. It said some countries may consider temporary controls on capital inflows to try to mitigate a recurrence of such instability.
About Hilbroy Advisory Inc.
Hilbroy Advisory Inc. is a Canadian based advisory and consultancy services company founded in 2000. Our Company provides publicly traded and private companies, institutions and individuals with a series of advisory services enabling these companies to fully reach their corporate objectives and potential.
Our specialists will customize a service package that includes reviewing, identifying and recommending a series of specific action and tasks that help their clients’ management decisions when seeking
• Go Public strategy,
• Debt and or equity financing
• Identify prospective investors
• Hire investor relations firm
• Cross listing decisions
• Planning road-shows and promotional campaigns.
Hilbroy Advisory has established numerous international relationships over the years with Broker Dealers, Hedge Funds, Institutional Investors, High net worth Investors as well as with investor relations firms and consultants. These relationships are made available to all Hilbroy clients and our team will manage the relationships from introduction to post financing activities.
Contact:
Jean François Amyot
HilbroyAdvisory, Inc.
1400 rue Begin
Montreal, QC H4R 1X1
info@hilbroyadvisory.com
www.hilbroyadvisory.com
Tel: 514-334-3131
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About
Hilbroy Advisory Inc. is a Canadian based advisory and consultancy services company founded in 2000. Our Company provides publicly traded and private companies, institutions and individuals with a series of advisory services enabling these companies to fully reach their corporate objectives and potential.
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