African governments must act decisively to restore macroeconomic balance

African finance ministers and central bankers gathered in Washington DC last week for the IMF and World Bank Spring Meetings in circumstances far removed from the warm glow of economic success surrounding the “Africa Rising” conference in Maputo, less than two years ago. With the IMF continuing to peg back its growth forecasts for the region, as the hostile global economic environment for developing countries shows little sign of abating, African policymakers are being required to play a hand over the coming months and years that will not only challenge their technical expertise but will place the institutions of economic policymaking under considerable stress. Securing macroeconomic stability has returned abruptly to centre stage in Africa. This time, however, the task is to navigate the difficult waters ahead in a way that doesn’t turn a tricky stabilisation challenge into a full blown crisis and undo the gains in prosperity so many countries have enjoyed over the last two decades. Economic reforms over the last two decades mean policymakers currently have more effective macro policy instruments at their disposal than before, but in the end success will depend on how well policymakers make difficult political choices on fiscal policy.