Resident Rep of IMF Encouraged By Efforts to Spur Higher Levels of Growth

International Monetary Fund (IMF) Resident Representative, Dr. Constant Lonkeng Ngouana, says he is encouraged by Government-led multi-stakeholder efforts to spur higher levels of sustainable growth for Jamaica.

This, he notes, is through interventions and measures designed to address the underlying impediments.

He was speaking at the Rotary Club of St. Andrew’s weekly luncheon at Hotel Four Seasons in New Kingston, on Tuesday (July 16).

Dr. Ngouana said one emerging outcome is growth in loans to the private sector, which was previously limited consequent on heavy government borrowing from financial institutions.

“Governments were paying high interest rates, so financial institutions would sit on [those] government papers until they mature. Now the Government has stopped borrowing and is actually pumping money back into the financial system. So, there’s a lot of cash… and it is very encouraging to see that the banks are now thinking about how to broaden private-sector access to financing,” he said.

The IMF Representative further said that steady reduction in the national debt, for which the ratio to gross domestic product has fallen below 100 per cent, continues to increase the quantity of cash within the financial ecosystem.

Against this background, he emphasised the need for steps to ensure those funds are used for Jamaica’s development and not channelled into engagements not beneficial to the country.

Dr. Ngouana said the Government has also been taking steps to address the agricultural sector’s vulnerability to the impact of climate change, which he cites as another impediment to growth.

This, he noted, is reflected in the Government’s Budget, through earmarked provisions for irrigation projects, while also highlighting provisions for farm road improvement projects and accelerated land titling.

“The state of agriculture in Jamaica is still one where, if it rains too much, it’s an issue and if it doesn’t rain, it’s an issue. That cannot be the case in a modern economy,” Dr. Ngouana said, while emphasising that strengthening the sector’s resilience “is certainly a key priority”.

He further argued that strengthening the sector’s resilience to enable increased outputs will contribute to significantly reducing Jamaica’s food import bill, and provide a steady and reliable supply of produce to the tourism industry.

In relation to crime, which he described as the “elephant in the room”, Dr. Ngouana contended that it is “certainly one of the biggest impediments to growth”.

He cited an IMF study that suggests that if Jamaica is able to significantly reduce the murder rate, in particular to the world average of six per 100,000 persons, that would contribute to spurring almost 0.5 per cent growth, which he described as “a big number, in relative terms”.

“Those, we believe, are the main challenges [to attaining higher levels of sustainable growth]. Analyses, not only by the IMF, show that a precondition for growth is a stable macroeconomic environment… to be able to attract investors,” Dr. Ngouana added.