Sub-Saharan Africa Regional Economic Outlook: Navigating Uncertainty
Sub-Saharan Africa, October 18, 2019
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Bibliographic details
- Published: October 18, 2019
- Series: Sub-Saharan Africa
Growth projections and headline findings
- Growth in sub-Saharan Africa is projected to remain at 3.2 percent in 2019 and rise to 3.6 percent in 2020.
- The expected recovery is at a slower pace than previously envisaged for about two-thirds of the countries in the region, partly due to a challenging external environment.
- Growth is projected to remain strong in non-resource-intensive countries, averaging about 6 percent.
- As a result, 24 countries, home to about 500 million people, will see their per capita income rise faster than the rest of the world.
- Growth in resource-intensive countries is projected at 2½ percent.
- Hence, 21 countries are projected to have per capita growth lower than the world average.
- The downward revision for about two-thirds of countries reflects:
- a more challenging external environment,
- continued output disruptions in oil-exporting countries,
- weaker-than-anticipated growth in South Africa.
Chapter 2 — Competition, competitiveness, and growth
- More than 70 percent of the countries in the region are in the bottom half of countries globally in terms of competition indicators.
- Firm markups are about 11 percent higher in sub-Saharan African countries relative to other emerging market economies and developing countries and are more persistent.
- State-owned firms are more prevalent in the region.
- Empirical analysis suggests that increased competition can boost real per capita GDP growth rate by about 1 percentage point through:
- improved export competitiveness,
- productivity growth,
- investment.
Chapter 3 — Domestic arrears: causes, symptoms, and cures
- Domestic arrears have been pervasive in many countries, reflecting weak public financial management.
- Arrears have increased in recent years (to about 3.3 percent of GDP in 2018), following the 2014 commodity price shock.
- Effects of domestic arrears include:
- negative impacts on private sector activity,
- weakened delivery of social services,
- increased banking sector vulnerabilities,
- undermined citizens’ trust in the government,
- weakening the ability of fiscal policy to support growth and casting doubt on the merit of relying on arrears financing to avoid spending cuts.
- Approaches discussed to clear and prevent arrears accumulation:
- verification,
- prioritization,
- liquidation,
- public financial management reforms,
- building buffers,
- timely external supports.
Policy implications and recommended priorities
- Carefully calibrate the near-term policy mix to reduce risks and promote sustained and inclusive growth across all countries in the region.
- Build resilience to external shocks and domestic vulnerabilities.
- Raise medium-term growth through reforms that enhance competition, productivity, and investment.
- For arrears management, pursue verification, prioritization, and liquidation while strengthening public financial management, building buffers, and securing timely external support.
Sub-Saharan Africa Regional Economic Outlook: Navigating Uncertainty — IMF web landing page overview
Content in this bundle
- Background Papers. Sub-Saharan Africa Regional Economic Outlook, October 2019
- Chapter 1
- 2. Competition, Competitiveness, and Growth
- Chapter 3
- Sub-Saharan Africa Regional Economic Outlook; Navigating Uncertainty, October 2019
- Statistical Appendix. Sub-Saharan Africa Regional Economic Outlook, October 2019
- Table of Contents. Executive Summary. Sub-Saharan Africa Regional Economic Outlook, October 2019
References
- Abebe Aemro Selassie, Director of the IMF African Department, gives an overview of the latest Regional Economic Outlook Report for Sub-Saharan Africa.
- IMF Data Portal
- [IMF Data Mapper® v3
Plot, compare and import data](https://www.imf.org/external/datamapper/datasets/AFRREO)