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World Economic and Financial Surveys

Regional Economic Outlook:
Sub-Saharan Africa

October 2008

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Sub-Saharan Africa's prospects have deteriorated somewhat and the risks have increased, according to the October 2008 Regional Economic Outlook: Sub-Saharan Africa. Growth in the region is projected to dip to 6 percent in 2008 and 2009. The fall is due mainly to the global food and fuel price shock, which has weighed particularly on growth in oil-importing countries, and to the global financial market turmoil, which has slowed global growth and demand for Africa's exports. Inflation is expected to rise to 12 percent in 2008, mainly on account of the food and fuel price shock. As a result of rising prices, particularly of food, poverty may well be on the increase in 2008. In 2009, inflation should ease to 10 percent, helped by recent commodity price declines. There are significant risks to the outlook related to a potentially deeper and longer period of global financial turmoil and resulting slowdown in global activity, and substantial uncertainty concerning commodity prices.

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Contents

Abbreviations
Executive Summary
 
I. Overview
  Recent Developments in the World Economy
  Domestic Developments
  Policy Challenges and Responses to Date
  Outlook for 2009 and Risks
 
II. The Great Sub-Saharan African Growth Takeoff: Lessons and Prospects
  Overview
  The Post-1995 Growth Takeoff
  Learning from African Success Stories
  Growth, Income Inequality, and Poverty in Sub-Saharan Africa
  Strategies and Policies to Sustain High Growth
 
Statistical Appendix
  Country Groupings
  Methods of Aggregation
  Member Countries of the Regional Groupings in Africa
  List of Tables
References
 
Publications of the IMF African Department, 2004-08
 
Boxes
1.1. Global Commodity Prices and Price Developments in EAC Countries
1.2. Policy Responses in Liberia and Cameroon
1.3. Targeting of Policies to Protect the Poor from Rising Commodity Prices: The Case of Senegal
1.4. How Should Monetary Policy Respond to the Food and Price Shock?
1.5. Expanding Agricultural Production in Sub-Saharan Africa
2.1. Identifying High- and Low-Growth Countries
2.2. Lessons from Recent Growth Studies
2.3. Productivity in Sub-Saharan Africa: Changes since the Mid-1990s
2.4. Mozambique: Sustaining Growth after Stabilization
2.5. Tanzania's Growth Experience
2.6. Growth and Structural Transformation in Uganda
2.7. The Mauritian Growth Miracles
2.8. Sub-Saharan African Oil Producers during Past and Present Oil Booms
 
Tables
1.1. Sub-Saharan Africa: Selected Indicators, 2004-09
1.2. Sub-Saharan Africa: Inflation and Monetary Policy Response, 2007-08
1.3. Sub-Saharan Africa: Non-Oil Primary Fiscal Deficits in Oil Exporters
2.1. Sub-Saharan Africa: Income Growth and Demographic Characteristics, 1995-2007
 
Figures
1.1. GDP Growth in Recipients of Sub-Saharan African Exports
1.2. World Commodity Prices
1.3. Sub-Saharan Africa: Foreign Direct Investment
1.4. Sub-Saharan Africa: Inflation in Selected Countries
1.5. Sub-Saharan Africa: Real Interest Rates in Selected Countries
1.6. Sub-Saharan Africa: Real Effective Exchange Rates in Oil Exporters and Oil Importers
1.7. Sub-Saharan Africa: Real Effective Exchange Rates in the CFA Franc Zone
1.8. Sub-Saharan Africa: GDP Growth
1.9. Sub-Saharan Africa: Inflation
1.10. Sub-Saharan Africa: External Current Account Balances
1.11. Sub-Saharan Africa: Growth Prospects
2.1. Sub-Saharan Africa: Exchange Rate Distribution, 2005-07
2.2. International Comparisons: GDP per Capita
2.3. Sub-Saharan Africa: GDP per Capita Growth, Five-Year Averages
2.4. Frequency of Growth Up-Breaks in Sub-Saharan Africa
2.5. Sub-Saharan Africa: Real GDP per Capita Growth
2.6. Number of Conflicts in Sub-Saharan Africa, 1989–2005
2.7. Sub-Saharan Africa: GDP per Capita Growth Post-Conflict
2.8. Terms of Trade Shocks
2.9. Foreign Direct Investment
2.10. Aid to Sub-Saharan Africa
2.11. Aid and Growth in Sub-Saharan Africa
2.12. Macroeconomic Indicators
2.13. Measuring Overvaluation: Exchange Rate Overvaluation
2.14. Openness and Trade Policy
2.15. Exports of Goods and Services as a Percentage of GDP
2.16. Sub-Saharan Africa: Network Industries and Domestic Financial Liberalization
2.17. CPIA Structural Policies and Constraints on Chief Executive
2.18. Institutions/Governance
2.19. Financial Linkages
2.20. Total Investment and Growth
2.21. Growth Rates
2.22. Poverty Reduction
2.23. Growth and Inequality
2.24. Social Indicators
 
Map
1.1. Sub-Saharan Africa: Current Account Impact of 2008 Commodity Price Changes