IMF MD Urges African Nations to Deepen Fiscal Reforms and Regional Trade Amid Global Volatility
International Monetary Fund (IMF) Managing Director Kristalina Georgieva has called on African governments to urgently strengthen domestic fiscal fundamentals, deepen monetary policy autonomy, and scale up regional trade integration in response to the current wave of global economic uncertainty.
Addressing a question at the IMF Spring Meetings press briefing on Thursday regarding divergent monetary responses across the continent, including Ghana’s recent rate hike and Egypt’s rare rate cut, Georgieva acknowledged the continent’s diversity while issuing a clear call for tailored, country-specific strategies underpinned by regional cooperation and good governance.
“Africa is not a country; it is a continent,” she stated emphatically. “Different countries face different challenges, but the need to strengthen fundamentals is universal.”
Slowing Global Growth and Indirect Shocks
While the direct effects of global trade tensions and new tariffs may be modest for many African economies, Georgieva warned that the indirect effects, particularly from slowing global growth and weaker commodity demand, could further depress already revised growth projections for the region.
The IMF has downgraded its growth outlook for Sub-Saharan Africa, reflecting tighter financial conditions, reduced aid inflows, and declining investment appetite in frontier markets. Oil-producing nations like Nigeria face new fiscal pressures amid falling crude prices, while oil importers could experience temporary relief, but not without structural risks.
The Fiscal Front: No Excuses on Tax Reform
Georgieva emphasised that strengthening fiscal capacity must remain a top priority across African economies, particularly in low-income and fragile states. She dismissed recurring arguments that tax expansion is politically or administratively unfeasible.
“Do not use any excuses, ‘Oh, it’s difficult; we cannot go for more tax.’ Yes, you can,” she said pointedly. “There is a lot that can be done to broaden the tax base and reduce tax evasion.”
The use of digital tools to enhance tax collection, a reform path already underway in countries like Rwanda and Kenya, was cited as a critical best practice for improving domestic resource mobilisation, especially for countries like Ghana, where tax-to-GDP ratios remain below the sustainability threshold.
Monetary Policy: Avoid Imitation, Embrace Data
Georgieva also urged African central banks to avoid monetary policy mimicry in response to global trends. With inflationary pressures diverging across economies, she called for a more data-driven and context-sensitive approach to interest rate decisions, rather than adopting the policy stance of regional peers without due consideration.
“You have to really assess your own inflationary pressures and do the right thing for your country,” she said, highlighting the varied experiences of countries such as Ghana, Egypt, and Côte d’Ivoire.
Combating Corruption and Shifting the Narrative
In a candid observation, Georgieva noted that corruption and conflict in one country can cast a shadow over the entire continent, undermining Africa’s reputation and investment appeal. She called for stronger governance frameworks and a collective effort to rebrand the continent as a reliable and attractive economic partner.
“Everybody suffers from wrongdoing in one country. It throws a shadow on the rest of the continent,” she warned.
AfCFTA and Regional Collaboration: A Game Changer
Ending on a hopeful note, Georgieva reiterated the transformative potential of the African Continental Free Trade Area (AfCFTA) and urged countries to remove existing barriers to intra-African commerce, including infrastructure deficits and regulatory bottlenecks.
“Like with ASEAN, deepen interregional trade and cooperation,” she said. “Africa has so much to offer the world: minerals, a young population, and immense economic potential.”
The Managing Director’s remarks align with the IMF’s broader policy direction for Africa: structural reform, regional integration, and resilient institutions as the foundations for long-term prosperity.
