The Managing Director of the International Monetary Fund (IMF), Christine Lagarde on Tuesday stressed the need for Nigeria and other African countries to ensure that they diversify their economies in other to be able to withstand shocks.
Lagarde stated this in a paper titled: â€œHarnessing the Power of Economic Diversification,â€ she presented in Cotonou.
She said promoting economic diversificationwas akin to weaving a beautiful traditional fabricas well as weaving an economic fabric that is more complex, more resilient, and more beneficial to all families and communities.
She noted that by improving policies and strengthening institutions, governments in sub-Saharan Africa have contributed to fundamental progress over the past generation.
â€œMany countries have enjoyed much longer periods of uninterrupted growth, rather than episodes of boom and bust. And millions of people now enjoy longer, healthier, and more prosperous lives.
â€œOver the past 25 years, life expectancy in the region has increased by a fifth; infant and maternal mortality rates have halved; and primary school enrolment is up to 80 percent.
At the same time, several countries are struggling to lift living standards. This year, 12 of 45 countries in sub Saharan Africaâ€”home to about 400 million peopleâ€”are expected to see negative per capita income growth. So there is work to doâ€”especially when it comes to demographics.
â€œWe are at the beginning of a major transitionâ€”one that is driven by young and growing populations. By 2030, half of the annual increase in the global working age population is expected to come from sub-Saharan Africa,â€ she added.
Lagarde noted that diversification should alsobe driven by openness and trade integration, as well as foreign direct investmentâ€”which helps transfer technology, promotes skills development, and fosters competition.
Moreover, diversification is supported by lower income inequality and higher gender equality, she added.
The IMF boss pointed out that Africa remainsthe largest recipient of the Fundâ€™s capacity development efforts.
â€œBy strengthening revenue collection, countries can support investments in infrastructure, education and training, and even research and development. The goal is to help create a virtuous circle of diversification, stronger economic activity, and more revenue.
â€œThese experiences show that there is no typical diversification pattern, and successful efforts will reflect countless individual decisions by people and businesses,â€ she said.