From Marcus Nkire
The African Development Bank, , has urged African central banks to adopt stricter monetary policies to curb rising inflation and stabilise economies across the continent.
According to the Bank, African nations need prudent monetary and exchange rate policies capable of anchoring long-term inflation expectations amid persistent global economic uncertainties.
The AfDB stressed that monetary policies must be carefully coordinated with fiscal measures to enable governments cushion the impact of rising food and energy prices on vulnerable households and small businesses.
It further recommended that where fiscal conditions permit, governments should introduce temporary and targeted social protection programmes aimed at supporting the poorest populations affected by global economic shocks.
However, the Bank warned against excessive subsidies and broad price controls, saying such measures could worsen long-term fiscal risks and encourage economic inefficiency.
“Such measures should be temporary and carefully calibrated within each country’s context to avoid fiscal profligacy through expensive subsidies,” the report noted.
The AfDB also observed that African economies have remained highly vulnerable to global crises, including wars and pandemics, which often result in prolonged periods of weak economic growth.
According to the report, major global disruptions have historically triggered declines in Africa’s real GDP per capita growth.
It cited the period between 1991 and 1994, when real GDP per capita growth remained negative for four consecutive years due largely to the impact of the Gulf War.
