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World Economic and Financial Surveys

Regional Economic Outlook:
Sub-Saharan Africa

April 2010

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The economic slowdown in sub-Saharan Africa looks set to be mercifully brief. Recovery is now under way across the region. The region’s relative resilience during this global recession, compared with previous global downturns, owes much to the health of its economies and the strengthening of policy frameworks in the run-up to the crisis. Countercyclical macroeconomic policies played an important role, with nearly two-thirds of those sub-Saharan Africa countries that experienced a slowdown in 2009 increasing government spending to buttress economic activity. However, progress toward the Millennium Development Goals receded. Middle-income and oil-exporting countries were hit hardest by the collapse in world trade and commodity markets; the region’s low-income countries escaped fairly lightly. Looking ahead, fiscal policies in sub-Saharan Africa generally need to be refocused toward medium-term objectives, macroeconomic policy buffers rebuilt, and financial systems strengthened. Published biannually in May and October.

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Contents

Preface
Abbreviations
Main Findings
 
1. Back to High Growth?
  Introduction and Summary
  A Differentiated Picture in 2009
  The Turning Point
  2010 and Beyond
  Policy Implications
  Minimizing Financial Shocks
 
2. How Countercyclical and Pro-Poor Has Fiscal Policy Been during the Downturn?
  Introduction and Summary
  Has Fiscal Policy Been Countercyclical?
  How Did Public Investment and Social Spending Fare during the Crisis?
 
3. Private External Financing Flows and the Global Financial Crisis
  Introduction and Summary
  International Financial Integration and Developing Countries
  The Pattern of Private Financing Flows during the Crisis
  Policies to Manage Capital Inflows—Avoiding Hard Landings
  Policies to Attract Private Capital Flows
 
Statistical Appendix
References
 
Publications of the IMF African Department, 2009–2010
 
Boxes
2.1. Characterizing Fiscal Policy Responses—A Simplified Approach
2.2. Fiscal Policy Implementation in Africa
2.3. Social Protection and Promotion Programs in Sub-Saharan Africa
3.1. South Africa, Africa’s Largest Capital Market
3.2. The Emergence of Sub-Saharan African Stock Markets
3.3. Official Aid during the Global Economic Crisis
3.4. Consistent Winners and Losers in the Competition for Investment Inflows
3.5. Attracting and Reaping the Benefits of FDI in Sub-Saharan Africa
 
Tables
1.1. Sub-Saharan Africa: Change in Key Indicators Between 2004–08 and 2009
2.1. Sub-Saharan Africa: 2009 Budget Plans vs. 2003–07 Average
2.2. Sub-Saharan Africa: Median Real Primary Spending Growth, Budget Plans, 2008–2009 vs. 2003–07 Average
2.3. Sub-Saharan Africa: 2009 Budget Outturns vs. 2003–07 Average
2.4. Sub-Saharan Africa: Median Capital and Health and Education Expenditure, 2003–09
3.1. Sub-Saharan Africa: Gross Financial Inflows, 2002–09
3.2. Sub-Saharan Africa: Average Correlation between Gross Private and Official Inflows over the 2002–09 Cycle
3.3. Sub-Saharan Africa: Average Correlation between Gross Private and Official Inflows over the 2002–09 Cycle
 
Figures
1.1. Sub-Saharan Africa and World: GDP Growth
1.2. Sub-Saharan Africa: GDP Growth by Country, 2009
1.3. Sub-Saharan Africa: GDP Growth Deceleration in 2009 vs. Export Ratios
1.4. Sub-Saharan Africa: GDP Growth in 2004–08 and 2009 by Country Groups
1.5. Sub-Saharan Africa: Contributions to GDP Growth
1.6. Sub-Saharan Africa: Current Account Balance by Country Groups
1.7. Sub-Saharan Africa: Fiscal Balance by Country Groups
1.8. Sub-Saharan Africa: Africa: Real Effective Exchange Rates by Country Groups
1.9. Sub-Saharan Africa: High-Frequency Macroeconomic Indicators
1.10. Sub-Saharan Africa: Sharing in World Recovery
1.11. World: Contributions to GDP Growth
1.12. Sub-Saharan Africa: Exports by Destination
1.13. Sub-Saharan Africa and World: Change in Private Investment-to-GDP Ratios between 2003–07 and 2009
1.14. Sub-Saharan Africa: Primary Balance vs. Debt-Stabilizing Primary Balance, 2007, 2009, and 2011
1.15. Sub-Saharan Africa: GDP Growth, 2004–08 vs. 2010–12
1.16. Sub-Saharan Africa: Projections Made in Spring 2008, 2009, and 2010
1.17. Sub-Saharan Africa: IMF Lending Commitments, 2007–09
2.1. Sub-Saharan Africa: Projected Growth Gaps
2.2. Sub-Saharan Africa: Fiscal Cyclicality, 2009 Budget Plans
2.3. Sub-Saharan Africa: Budget Spending Plans, 2009
2.4. Sub-Saharan Africa: Median Real Primary Spending Growth, Budget Plans, 2008–09
2.5. Sub-Saharan Africa: Estimated Growth Gaps and Fiscal Cyclicality, 2009 Budget Outturns
2.6. Sub-Saharan Africa: Deviations in Fiscal Cyclicality, 2009 Budget Plans vs. Outturns
2.7. Sub-Saharan Africa: Real GDP Growth Gap Forecast Errors, and Fiscal Responses, 2009
2.8. Sub-Saharan Africa: Budget Plans and Outturn Differences, 2008–09
2.9. Sub-Saharan Africa: Revenue and Spending Deviations, 2009 Budget Plans vs. Outturns
2.10. Sub-Saharan Africa: Foreign Financing and Fiscal Stance
2.11. Sub-Saharan Africa: Capital Expenditure, 2003–08
2.12. Sub-Saharan Africa: Capital Expenditure, 2008–09 vs. 2003–07
2.13. Sub-Saharan Africa: Planned vs. Observed Capital Expenditure, 2008 and 2009
2.14. Sub-Saharan Africa: Health and Education Spending , 2008–2010 vs. 2006–07
3.1. Sub-Saharan Africa: Governance and Human Capital Outcomes
3.2. Volume and Composition of Private Financial Flows to Emerging and Developing Countries
3.3. The Private Financing Cycle in Sub-Saharan Africa
3.4. Elasticities of Gross Private Inflows during the Expansion of 2002–07
3.5. Composition of Private Financial Flows to Sub-Saharan Africa
3.6. Concentration of Gross Private Inflows to Sub-Saharan Africa(Excluding South Africa)
3.7. International Sovereign Bond Issuance by Sub-Saharan Africa, 2000–09
3.8. Sub-Saharan African Countries with Sovereign Ratings
3.9. Selected Indicators of Access to International Capital Markets
3.10. Contributions to Changes in Inflows over the Cycle
3.11. Sub-Saharan Africa: Oil Investment and Producation
3.12. Terms of Trade and Financial Shocks, Sub-Saharan Africa Non-Oil Exporters
3.13. Terms of Trade and Financial Shocks Sub-Saharan Africa Oil Exporters
3.14. Remittance Flows, 2008–09
3.15. Official and Private Financing to Sub-Saharan Africa Excluding South Africa and Nigeria
3.16. Sub-Saharan Africa: Exchange Market Pressure Index
3.17. Sub-Saharan Africa Selected Macroeconomic Policy Indicators
3.18. Sub-Saharan Africa: Postcrisis GDP Growth Deceleration and Selected Policy Indicators during the Precrisis Capital Inflow Period