Luanda - The governor of the National Bank of Angola (BNA), Manuel Tiago Dias, said on Tuesday that it is necessary to adopt measures to control and stabilize prices in the economies of the Southern African region.
Angola’s central bank manager was speaking at the presentation ceremony of the IMF Report, dated April 2024, on 'Regional Economic Perspectives for Sub-Saharan Africa: A Timid and Expensive Recovery'.
He mentioned that around a third of the countries in the region have recorded double-digit inflation rates, which is why he considered it important to stabilize prices to face this situation.
“It is notable to mention the situation in Angola, which has recorded high inflation rates since the second half of 2023”, he highlighted.
He added that the situation in the region is related to factors such as the depreciation of local currencies, rising food prices and adverse weather conditions, marked by excessive rains and extreme droughts.
On the fiscal side, he said, difficulties still persist in obtaining financing, despite the efforts of various government authorities on the continent to consolidate public finances, which culminated in the reduction of the fiscal deficit and the stabilization of the debt ratio as a percentage of GDP.
This fact takes into account the current level of interest rates in international markets, which may make the cost of debt unsustainable for some countries, sources of domestic financing, as well as aggravating the risks of rollover of public debt.
According to the governor, it is important to find sustainable solutions to these fiscal challenges as part of broader efforts to combat high inflation in the region.
On the other hand, he made known the existence of some recommendations made in the report that translate into policies and structural reforms that, once implemented, could boost growth and development in Africa, in the medium and long term.
He advocated prudence in the conduct of monetary policy, especially in countries with high inflationary pressures, aiming to achieve price stability, even if this may have a negative impact in the short term.
In the fiscal domain, he considered it essential that countries constantly improve the management of public finances, mobilizing resources and improving the quality of spending.
This process must be carried out without compromising public investments, taking into account their multiplier effect on the economy.
“It is essential to find a balance within this paradigm to guarantee sustainable development”, he stressed.
In the medium and long term, he said it is essential to implement structural reforms to improve the business environment and attract foreign direct investment, capable of boosting the process of diversification of economies on the continent.
He highlighted the importance of international support provided by multilateral and regional institutions, both in terms of technical assistance and access to financing lines with favorable interest rates.
However, he said that the reforms are not easy to implement, due to the continent's economic situation and international geopolitical issues.
According to the BNA governor, the report presented predicts improvements at the region level, with economic growth of 3.8% for the current year and 4.0 in 2025. This performance represents an increase in relation to the rate recorded in 2023 which was 3.4%. ASS/VC/DOJ
