## West Africa: Economic Recovery and Beyond

_IMF Blog, November 2, 2010_

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**Canonical URL:** [West Africa: Economic Recovery and Beyond](https://www.imf.org/en/blogs/articles/2010/11/02/west-africa-economic-recovery-and-beyond)

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## Bibliographic details
- Authors: Mark Plant
- Published: November 2, 2010

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### Economic growth
- IMF mission launched the October 2010 Regional Economic Outlook on sub-Saharan Africa; reactions were "very positive."
- The central message: "Africa’s resilience to the global economic crisis has owed much to good policy management here, both before and during the crisis."
- West African countries "fared relatively well during the global financial crisis." The slowdown was "mild" and growth rates "appear to have already bounced back to their pre-crisis levels."
- Long-term difference: "West Africa hasn’t been able to move into, and sustain, the higher rates of economic growth needed to make serious inroads in job creation and poverty reduction."

### Growth challenge
- Comparative focus: eight countries of the West Africa Economic and Monetary Union (WAEMU) — Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo — compared with other countries in sub-Saharan Africa.
- WAEMU features: single trading block, single stable currency over the last fifteen years, and "benefited from low inflation."
- Performance summary:
  - "Over the past fifteen years per capita incomes grew, on average, by less than 1 percent each year."
  - "In sub-Saharan Africa as a whole, the growth rate has been more than twice that; and more than four times that in the region’s highest growers."
- No single explanatory factor identified: not attributable solely to initial income levels, natural resource endowments, location, or primarily to global forces (world trade or prices).

### What's holding back growth?
- Four noteworthy impediments identified:
  - Political instability:
    - "Periods of political instability were associated with particularly lackluster performance" in slower-growing WAEMU countries — Côte d’Ivoire, Guinea-Bissau, Niger and Togo.
    - Political instability complicated macroeconomic management.
  - Low investment:
    - "Private investment rates in most WAEMU countries have been noticeably lower than in other sub-Saharan African countries" — low investment in both public and private sectors, with "relatively little foreign direct investment."
  - Weak business environment and governance:
    - "Perceptions of governance remain weak."
    - WAEMU countries have ranked low in the World Bank’s Doing Business Survey and other composite indicators.
  - Inadequate physical infrastructure and weak public services:
    - Shortfalls "especially in education and health."
    - "Underinvestment in physical and human capital undermines the private sector’s ability to produce goods and services efficiently."

### Actions to raise growth (policy recommendations)
- Political stability:
  - "Political stability is a necessary precondition for macroeconomic stability and sustaining improved performance."
- Infrastructure and human capital:
  - Upgrade "weak energy and transport infrastructure."
  - Improve "health and education standards."
- Governance and business environment:
  - Ensure "good governance, including market-friendly regulations, effective financial sector supervision, and enforcement of laws" to support a more competitive private sector.
- Fiscal and investment strategy:
  - Make room for "higher pro-growth government expenditure" by:
    - Increasing revenues so critical investments can be made.
    - Building capacity to safely attract and manage private finance.
    - Improving the quality of spending.
  - Improve budget institutions, with emphasis on:
    - "Improving financial management, prioritizing expenditures, and ensuring their high quality."
- Evidence of progress:
  - "The four higher-growing WAEMU countries—Benin, Burkina Faso, Mali, and Senegal—performed significantly better in the last fifteen years than they did in the fifteen years before that."
  - IMF expresses confidence that "the region as a whole can realize its potential for higher growth, more jobs, and faster poverty reduction."

*Source: West Africa: Economic Recovery and Beyond (IMF blog post, Mark Plant, November 2, 2010)*

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## References

- [Regional Economic Outlook](http://www.imf.org/external/pubs/ft/reo/2010/AFR/eng/sreo1010.htm)

_Source: https://www.imf.org/en/blogs/articles/2010/11/02/west-africa-economic-recovery-and-beyond_