Press Release: IMF Outlook for Sub-Saharan Africa: "Maintaining Growth in an Uncertain World"

October 12, 2012

Press Release No. 12/390
October 12, 2012

The International Monetary Fund (IMF) today released the October 2012 Regional Economic Outlook: Sub-Saharan Africa. Ms. Antoinette Monsio Sayeh, Director of the IMF's African Department, commented on the report's main findings:

“Economic conditions in sub-Saharan Africa have remained generally robust against the backdrop of a sluggish global economy. Most low-income countries continued to grow soundly in 2012, although drought in many Sahel countries and political instability in Mali and Guinea-Bissau undermined economic activity. Middle-income countries, especially South Africa, slowed further, reflecting closer links to European markets. Inflation fell, as pressures on food and fuel prices eased following a surge during 2011.

“The near-term outlook for the region remains broadly positive, with growth projected above 5 percent a year in 2012–13. Strong domestic demand, including from investment, is expected to support growth in many low-income countries, but a weak external environment, particularly in Europe, will continue to be a drag on middle-income countries’ growth. With global commodity prices projected to remain soft and domestic climatic conditions improving, inflation is expected to decline to about 8 percent through end 2012, and about 7 percent through end 2013. The recent surge in international cereal prices is likely to exacerbate food insecurity in some places, and could be a threat to inflation if it intensifies.

“Downside risks have increased. Further deterioration in the world economy could quickly spill over into slower growth in sub-Saharan Africa, potentially reducing the regional growth rate by about 1 percent a year. The impact would be most severe in countries where exports are undiversified and policy buffers low.

“Policy settings should reflect country-specific conditions. For now, policymakers should rebuild fiscal and external buffers where these remain low. In the event of a significant global downturn, with knock-on effects on sub-Saharan Africa, pro-cyclical fiscal contraction should be avoided provided that wider fiscal and external deficits can be financed. Monetary and exchange rate levers should be utilized where policy space is available.

Ms Sayeh also drew attention to key messages of the two background papers in the Regional Economic Outlook on potential economic spillovers from Nigeria and South Africa and on structural transformation in sub-Saharan Africa: “1) There are important trade, investment, and financial linkages between South Africa and other countries in the region, especially those which are members of the Southern African Development Community and the South African Customs Union; Nigeria’s financial linkages with countries further afield are growing as Nigeria-based banks expand throughout the region. 2) During the last 15 years, albeit at different speeds and following different paths, most countries in the region have experienced some degree of structural transformation, with a shift of workers from lower to higher average productivity activities and sectors. Depending on resource endowments, labor skills, and logistical and infrastructural features, some sub-Saharan African countries may find it easier to follow the Asian structural transformation path through manufacturing, whereas others may transform through services, and still others through agriculture.”

The full text of the October 2012 Regional Economic Outlook: Sub-Saharan Africa can be found on the IMF's website,


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