## The Impact of the Global Financial Crisis on Sub-Saharan Africa — Regional Economic Outlook (May 2009)

## Source details

**Canonical URL:** [The Impact of the Global Financial Crisis on Sub-Saharan Africa — Regional Economic Outlook (May 2009)](https://www.imf.org/-/media/websites/imf/imported-flagship-issues/external/country/nga/rr/2009/_051809eapdf.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-flagship-issues/external/country/nga/rr/2009/_051809eapdf.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-flagship-issues/external/country/nga/rr/2009/_051809eapdf.pdf.json)

---

### Agenda and framing
- Agenda:
  - How are recent developments in the world economy affecting sub-Saharan Africa?
  - What is the outlook and what are the risks?
  - How can the challenges be confronted?
  - What can the international community do?
  - What does the IMF do?
  - What is the outlook for Nigeria?
- Presentation author: Mark Plant, Deputy Director

### Global and regional growth developments
- Global growth projections and Real GDP Growth are presented with comparative series for Advanced economies and World across years 1990, 1995, 2000, 2005, 2010.
- Lower demand for African exports is documented via GDP Growth in Recipients of Sub-Saharan African Exports and World Trade Growth for years 2000–2010.
- Key commodity prices have fallen to 2007 levels or lower; indexes shown for Oil, Sub-Saharan Africa, other, and Sub-Saharan African metals (Index, 2003=100) for years 2003–2010 with a WEO forecast for 2010.
- Downward pressure on FDI and portfolio inflows is illustrated for 2004–10 with categories: Portfolio liabilities, Foreign direct investment in the country, Total (Billions of US dollars).

### Outlook and risks
- Growth projection summary:
  - Growth is projected to decline in 2009 and recover mildly in 2010.
  - GDP Growth time series (2004–10) distinguishes Sub-Saharan Africa, Oil-exporting countries, Oil-importing countries (Percent).
- Risks to the outlook:
  - Risks are mostly on the downside; Growth Prospects chart provides confidence intervals at 50 percent, 70 percent, 90 percent for Real GDP growth across 2004–2009.
- Inflation:
  - Inflation is expected to decline in most countries; series provided for Sub-Saharan Africa, Oil-exporting countries, Oil-importing countries (Percent) across 2004–2010.
- Fiscal and external positions:
  - Fiscal deficits are expected to widen; Central government overall fiscal balances, 2000–10, series for Sub-Saharan Africa, Oil-exporting countries, Oil-importing countries (Percent of GDP).
  - External position expected to weaken; External Current Account Balances series for 2004–2010 (Percent of GDP).

### Policy recommendations and responses for SSA
- Use available fiscal space:
  - Smooth shock through demand management.
  - Key questions: Is there adequate financing? Is debt sustainability at risk?
  - Maintain critical services.
  - Ramp up investment spending.
- Where possible, ease monetary policy and let the exchange rate adjust to the external environment:
  - Change in Monetary Policy across First semester 2008 and Second semester 2008 shown with categories Tightening, No change in policy, Loosening (Percent of SSA countries).
  - Real Effective Exchange Rates in Selected SSA Countries (Index, 2007=100) tracked for Nigeria and South Africa from Jan-07 to Mar-09.
- Monitor financial vulnerabilities and be prepared to act promptly.
- Keep medium-term goals in sight:
  - Enhance public financial management.
  - Strengthen social safety nets.
  - Lower the cost of doing business.
  - Avoid new restrictions on trade flows.

### Transmission channels to Nigeria
- Identified channels:
  - Oil prices are lower.
  - Financing flows are weaker.
  - Growth slowdown.

### Nigeria: macroeconomic developments and outlook
- Growth and inflation:
  - Nigeria faces a slowdown in growth but a pick-up in inflation; comparative series shown for Nigeria total, Emerging markets, Oil, Advanced (Percent) across 2005–2010.
- Fiscal and external balances:
  - Significant swing in fiscal and current account balance for Nigeria; Current Account Balance and Fiscal Balance series (Percent of GDP) across 2005–2010 compared with Emerging markets, Oil, Advanced.
- Macroeconomic policy response for Nigeria:
  - Stronger position going into crisis.
  - Fiscal response described as well-tuned.
  - End-2008 depreciation characterized as appropriate.
  - Exchange rate unification and flexibility identified as an important goal.

### The Role of the IMF
- Important steps taken:
  - Revised concessionality framework
  - Doubled access limits
- Ongoing initiatives:
  - Revising lending instruments
  - SDR allocation
- Continued work:
  - Policy advice and technical assistance

*Disclaimer: The views expressed herein are those of the authors and should not be attributed to the IMF, its Executive Board, or its management.*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-flagship-issues/external/country/nga/rr/2009/_051809eapdf.pdf_