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May 17, 2008

'There is no need for Africa to be a food importer'

The IMF's Africa chief has said the shock of rocketing food prices should focus attention on improving farming in Africa.

There is no reason for Africa to be a food importer, but governments and donors have neglected the continent's agriculture sector, said Benedicte Vibe Christensen, acting director for Africa of the International Monetary Fund. She recommended a broad-based approach. In addition to steps to help farmers boost production, rural infrastructure needs improvement, and banks and lenders need to extend more services outside the cities, she told reporters.

Christensen was in South Africa to present the IMF's regional economic outlook. It predicts growth at about 6.5 percent this year, mostly fueled by oil exporting countries like Nigeria and Angola.

"There's no need for Africa to be a food importer," Christensen said. She called for better policies and assistance, such as fertilizer subsidies, to boost farming output. But she also said a broad approach was needed to improve infrastructure generally outside the cities and to ensure that banking and lending facilities were extended to the countryside. The result would be not only better food production, but also an extension of the anti-poverty campaign beyond urban centers.

"If you look at 20 years of development, it hasn't really taken hold," she said. Improving the agriculture sector "requires investors, it requires policies."

The food crisis has been felt around the world but particularly in Africa, where most countries import food. African consumers have protested and even rioted against high prices.

"We understand the governments need to take measures, but we urge them to be targeted," Christensen said. She urged against general good subsidies, saying that usually this helps the better off and is expensive. She also said price controls tend to hurt domestic farmers while export controls — some poor countries have banned exporting rice and other food — "is aggravating significantly the problem of world supply."

The IMF forecasts inflation of 8.5 percent, and believes inflation could be higher given the rising oil and food prices. The fund is also saying that given the food and oil prices, and given the global slowdown in the economy and global turbulence in financial markets, there is a slight chance that African growth will be less than 5 percent.

The fund predicts South Africa, a regional powerhouse, will experience economic growth of only 2.8 percent in 2008. South Africa's economic expansion has exceeded expectations for some time, but is normalizing now. Power supply problems have lowered growth forecasts for this year.

Oil giant Angola will see 12.7 percent economic growth, Equatorial Guinea will experience 7 percent growth, and Nigeria will grow at 6.2 percent, the fund said.

At the other extreme, the fund said it expected Chad would slip into negative growth of .7 percent. It said it did not have enough information to forecast Zimbabwe's economic growth for 2008, but said the country saw negative growth of 6.1 percent last year.


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