## ssareo-10-18-toc

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### Section 1 — Recovery and Rising Risks

- Macroeconomic developments and prospects
  - Growth is expected to increase from 2.7 percent in 2017 to 3.1 percent in 2018, reflecting domestic policy adjustments and a supportive external environment, including continued steady growth in the global economy, higher commodity prices, and accommodative external financing conditions.
  - Inflation is abating; fiscal imbalances are being contained in many countries.
  - Over the medium term, and on current policies, growth is expected to accelerate to about 4 percent, which is assessed as too low to create the number of jobs needed to absorb anticipated new entrants into labor markets.
  - Financial inflows were strong in the first half of 2018 with record issuances of Eurobonds.

- Balance sheet vulnerabilities remain elevated
  - The fiscal adjustment to date largely reflects the oil price rebound for oil exporters coupled with sharp cuts in capital spending in several countries.
  - With few exceptions, there has been relatively little progress in strengthening domestic revenue mobilization.
  - Many countries have delayed adjusting domestic fuel prices in response to the recent oil price increase, resulting in the re-emergence of energy subsidies.
  - Domestic arrears remain large, contributing to a buildup in nonperforming loans (NPLs).
  - Beyond the central government, state-owned enterprises (SOEs) are becoming a major fiscal risk in some countries.
  - Financial sector vulnerabilities remain elevated with high NPLs weighing on banks’ balance sheets and constraining credit to the private sector.
  - Reserve buffers have generally not been rebuilt and, in half of the countries in the region, remain below levels considered adequate.

- Risks to the outlook
  - The outlook is surrounded by significant downside risks.
  - The global economy is entering a period of unusually elevated policy uncertainty.
  - Growth is already slowing in most advanced economies and could slow more sharply in the event trade tensions escalate.
  - Spikes in commodity prices and populist pressures in the run-up to elections in several countries could derail consolidation efforts.
  - Volatile capital flows and recent turbulence in emerging markets have led to some increase in spreads.

- Policies
  - Shielding the recovery and creating enough jobs requires strong, sustainable, and inclusive growth, which in turn requires policies to strengthen resilience and facilitate the reallocation of labor and capital into more productive sectors.
  - Policy priorities articulated:
    - Steady fiscal consolidation to reduce debt vulnerabilities.
    - Advancing revenue mobilization to ensure debt sustainability and create fiscal space for investment and development spending.
    - Enhancing the efficiency of expenditures, in particular to address the re-emergence of wasteful energy subsidies.
    - Allowing greater exchange rate flexibility where institutional setups permit and barring balance sheets vulnerabilities.
    - Addressing growing financial sector weaknesses in a timely manner.
    - Pursuing policies to foster private investment and enhance potential growth.

*International Monetary Fund, Regional Economic Outlook: Sub-Saharan Africa — Section 1 (Executive Summary and Section overview).*

### Section 2 — External finance, investment, and growth; Future of work in sub-Saharan Africa

- External finance, investment, and growth
  - While, at least historically, portfolio flows have not been strongly associated with either domestic investment or growth, they do seem to boost public consumption (including social spending).
  - By contrast, inward foreign direct investment appears to directly spur domestic investment, and in turn support economic growth.
  - These findings indicate a complex relationship between external finance, domestic macroeconomic stability, and investment and economic growth in the region.
  - Policy recommendations and cautions:
    - Policymakers need to be prudent and ensure that the borrowed resources are used effectively, enhance productivity, and promote sustainable economic growth.
    - Vigilance is also warranted against the buildup of macroeconomic and financial imbalances.

- Future of work in sub-Saharan Africa
  - Context and challenge:
    - The current wave of technological advances is set to shake up the landscape for jobs across the world.
    - Against this backdrop, how can sub Saharan Africa create the 20 million jobs per year needed over the next two decades to absorb its growing workforce?
  - Focus of the chapter:
    - This chapter focuses on how the current wave of technological innovation—the Fourth Industrial Revolution—will impact sub-Saharan Africa’s comparative advantage and the nature of work within countries in the region.
    - It draws on formal economic models but also on scenario analysis, which allow consideration of how the course of global economic integration and the impact of climate change could shape economic opportunities and thus the future of work in sub-Saharan Africa.
  - Overarching policy challenge:
    - The overarching policy challenge is to support the new and emerging sectors that drive growth. If successful, sub-Saharan Africa can create jobs for its young and growing population and make progress toward meeting the Sustainable Development Goals.
  - Development strategy priorities (integration and connectivity as key pillars):
    - Traditional and digital infrastructure
    - An education system that keeps pace with changing skill requirements
    - Smart urbanization
    - Safety nets for a volatile labor market
    - Trade integration

*Source: ssareo-10-18-toc - Section 2*

### Section 1

### 1. Recovery and Rising Risks

### Macroeconomic developments and prospects
- Growth is expected to increase from 2.7 percent in 2017 to 3.1 percent in 2018, reflecting domestic policy adjustments and a supportive external environment, including continued steady growth in the global economy, higher commodity prices, and accommodative external financing conditions.
- Inflation is abating; fiscal imbalances are being contained in many countries.
- Over the medium term, and on current policies, growth is expected to accelerate to about 4 percent, which is assessed as too low to create the number of jobs needed to absorb anticipated new entrants into labor markets.
- Financial inflows were strong in the first half of 2018 with record issuances of Eurobonds.

### Balance sheet vulnerabilities remain elevated
- The fiscal adjustment to date largely reflects the oil price rebound for oil exporters coupled with sharp cuts in capital spending in several countries.
- With few exceptions, there has been relatively little progress in strengthening domestic revenue mobilization.
- Many countries have delayed adjusting domestic fuel prices in response to the recent oil price increase, resulting in the re-emergence of energy subsidies.
- Domestic arrears remain large, contributing to a buildup in nonperforming loans (NPLs).
- Beyond the central government, state-owned enterprises (SOEs) are becoming a major fiscal risk in some countries.
- Financial sector vulnerabilities remain elevated with high NPLs weighing on banks’ balance sheets and constraining credit to the private sector.
- Reserve buffers have generally not been rebuilt and, in half of the countries in the region, remain below levels considered adequate.

### Risks to the outlook
- The outlook is surrounded by significant downside risks.
- The global economy is entering a period of unusually elevated policy uncertainty.
- Growth is already slowing in most advanced economies and could slow more sharply in the event trade tensions escalate.
- Spikes in commodity prices and populist pressures in the run-up to elections in several countries could derail consolidation efforts.
- Volatile capital flows and recent turbulence in emerging markets have led to some increase in spreads.

### Policies
- Shielding the recovery and creating enough jobs requires strong, sustainable, and inclusive growth, which in turn requires policies to strengthen resilience and facilitate the reallocation of labor and capital into more productive sectors.
- Policy priorities articulated:
  - Steady fiscal consolidation to reduce debt vulnerabilities.
  - Advancing revenue mobilization to ensure debt sustainability and create fiscal space for investment and development spending.
  - Enhancing the efficiency of expenditures, in particular to address the re-emergence of wasteful energy subsidies.
  - Allowing greater exchange rate flexibility where institutional setups permit and barring balance sheets vulnerabilities.
  - Addressing growing financial sector weaknesses in a timely manner.
  - Pursuing policies to foster private investment and enhance potential growth.

*International Monetary Fund, Regional Economic Outlook: Sub-Saharan Africa — Section 1 (Executive Summary and Section overview).*

### Section 2

### ssareo-10-18-toc - Section 2

### External finance, investment, and growth
- While, at least historically, portfolio flows have not been strongly associated with either domestic investment or growth, they do seem to boost public consumption (including social spending).
- By contrast, inward foreign direct investment appears to directly spur domestic investment, and in turn support economic growth.
- These findings indicate a complex relationship between external finance, domestic macroeconomic stability, and investment and economic growth in the region.
- Policy recommendations and cautions:
  - Policymakers need to be prudent and ensure that the borrowed resources are used effectively, enhance productivity, and promote sustainable economic growth.
  - Vigilance is also warranted against the buildup of macroeconomic and financial imbalances.

### Future of work in sub-Saharan Africa
- Context and challenge:
  - The current wave of technological advances is set to shake up the landscape for jobs across the world.
  - Against this backdrop, how can sub Saharan Africa create the 20 million jobs per year needed over the next two decades to absorb its growing workforce?
- Focus of the chapter:
  - This chapter focuses on how the current wave of technological innovation—the Fourth Industrial Revolution—will impact sub-Saharan Africa’s comparative advantage and the nature of work within countries in the region.
  - It draws on formal economic models but also on scenario analysis, which allow consideration of how the course of global economic integration and the impact of climate change could shape economic opportunities and thus the future of work in sub-Saharan Africa.
- Overarching policy challenge:
  - The overarching policy challenge is to support the new and emerging sectors that drive growth. If successful, sub-Saharan Africa can create jobs for its young and growing population and make progress toward meeting the Sustainable Development Goals.
- Development strategy priorities (integration and connectivity as key pillars):
  - Traditional and digital infrastructure
  - An education system that keeps pace with changing skill requirements
  - Smart urbanization
  - Safety nets for a volatile labor market
  - Trade integration

*Source: ssareo-10-18-toc - Section 2*

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_Source: https://www.imf.org/-/media/files/publications/reo/afr/2018/october/pdf/ssareo-10-18-toc.pdf_