http://news.xinhuanet.com/english/2016-10/26/c_135782556.htm
IMF projects slowest economic growth in Africa in two decades
Source: Xinhua | 2016-10-26 17:54:36 | Editor: huaxia
A train runs on the Ethiopia-Djibouti railway during an operational
test near Addis Ababa, Ethiopia, on Oct. 3, 2016. (Xinhua/Sun Ruibo)
NAIROBI, Oct. 26 (Xinhua) -- Economic growth in Africa is set to drop
to a 23-year-low of 1.4 percent in 2016 due to the drop in oil prices,
drought in Southern Africa and the political crisis in Eastern Africa,
the International Monetary Fund (IMF) forecast on Tuesday.
Abebe Selassie, IMF Director of the African Department, said the
record dip in economic growth in Africa would be short-lived and it is
resulted from the massive drop in commodity prices, including heavy
metals and oil, affecting key African countries.
"There are four reasons for this slowdown, the drought, low commodity
prices, the tighter financing conditions and the delayed policy
response in the region," Selassie told reporters during the launch of
this year's economic outlook for the Sub-Saharan Africa.
IMF says the region is likely to recover economically within the
shortest period if reforms are undertaken to correct a drop in
domestic revenue and the effective management of foreign debt, which
has partly affected local exchange rates.
According to the IMF projections, the economic growth in Africa is
expected to grow at 3 percent in 2017 and improve to 4.5 percent in
2018.
"This slowdown will be similar to previous ones. The delayed policy
response as a result of the political uncertainty and elections is
partly the reason for this, but if these risks are dealt with, the
economies will recover," Selassie added.
Speaking at the event, Kenyan Treasury Cabinet Secretary Henry Rotich,
said the government is preparing a number of laws to ensure that it
deals effectively with rising needs to finance large-scale
infrastructure projects such as the Standard Gauge Railway project.
"We have a Value Added Tax (VAT) law and a new Income Tax law that is
being completed to ensure that there are no free tax exemptions,"
Rotich said.
The government plans to implement the recommendations of IMF on
improving revenue collection through the improvement of tax collection
and raising the domestic revenue collection to between 22-25 percent
of the Gross Domestic Product (GDP).
Kenya's GDP stood at 70 billion U.S. dollars and the government is
likely to raise revenue collection to at least 25 percent.
Rotich said the efforts to raise the tax collection were likely to
take between five to 10 years.
Received on Wed Oct 26 2016 - 09:46:21 EDT