{
  "title": "Africa: Second Fastest-Growing Region in the World",
  "publication": "IMF Blog, June 10, 2013",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2013/06/10/africa-second-fastest-growing-region-in-the-world",
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  "summary": "Sub-Saharan Africa is the second fastest-growing region of the world today, trailing only developing Asia.",
  "sections": [
    {
      "heading": "Regional growth performance and drivers",
      "content": "- Sub-Saharan Africa is the second fastest-growing region of the world today, trailing only developing Asia.\n- In 2012, Sub-Saharan Africa maintained solid growth, with output growth at 5 percent on average.\n- Key factors supporting the region through the Great Recession and into 2012:\n  - Strong investment.\n  - Favorable commodity prices.\n  - Generally prudent macroeconomic management.\n- Dynamic sectors in many countries:\n  - Construction.\n  - Agriculture.\n  - Mining (especially due to new extractive industry capacity coming on stream)."
    },
    {
      "heading": "Two speeds of growth within the region",
      "content": "- The region has seen growth at two different speeds:\n  - Very strong growth among oil-exporting and low-income countries, supported by exports such as oil, minerals, agricultural products, and tourism.\n  - Slowed growth in middle-income countries in 2012, reflecting closer ties to the euro area; South Africa adversely affected by labor unrest in the mining sector.\n- One-off and country-specific supports expected to bolster growth in some countries:\n  - Nigeria’s economy rebounding after floods.\n  - Recovery of agriculture in regions previously affected by drought.\n  - Gradual normalization of activity in some post-conflict countries, such as Côte d’Ivoire.\n- Two-speed growth expected to persist for the next few years:\n  - Middle-income countries: continue to grapple with sluggish activity and limited room for policy stimulus.\n  - Oil exporters and low-income countries: expected to have solid growth.\n- Inflation outlook:\n  - Regional inflation expected to continue the downward trend begun in 2012.\n  - A handful of countries, such as Malawi, will probably still see high inflation going forward."
    },
    {
      "heading": "Forecasts and scenarios",
      "content": "- The latest Regional Economic Outlook projects a broadly positive near future for the region, with a moderate acceleration of growth expected in 2013–14.\n- Risk scenario analysis indicates adverse global shocks would affect sub-Saharan Africa’s growth, but not derail it.\n- Countries with limited policy buffers and a narrow export base could experience more severe adverse effects."
    },
    {
      "heading": "External and domestic risks",
      "content": "- External downside risks identified:\n  - (i) A prolonged near-stagnation in the euro area.\n  - (ii) A slowdown in major emerging market economies.\n  - Medium-term risks for the global economy remain high, although the near-term risk outlook has improved.\n- Domestic risks identified:\n  - Adverse climatic developments.\n  - Internal conflicts.\n  - These events could be severe for individual countries and their close neighbors, but would not have significant effects on the region as a whole."
    },
    {
      "heading": "Policy challenges and recommended policy responses",
      "content": "- The region’s positive outlook is conditional on implementing sound economic policies; priority short-run policy actions to contain or prevent imbalances include:\n  - Address sizable fiscal deficits in some countries, such as Ghana, with significant fiscal adjustments mindful of weak demand conditions where relevant.\n  - Monitor large fiscal expansion plans in some oil exporters, such as Angola, Chad, and the Republic of Congo, due to concerns over absorption capacity and cost effectiveness.\n  - Maintain continued higher interest rates set by central banks in countries where inflation remains high and/or volatile, such as Ethiopia, Malawi, and Tanzania.\n  - Carefully monitor surging current account deficits in some low-income and fragile countries, even when largely financed by export-oriented foreign direct investment.\n- Rebuilding buffers to handle external shocks remains a priority in many fast-growing countries:\n  - Many countries could find it difficult to raise sufficient financing for larger deficits in a downturn.\n  - The majority of them are not constrained from borrowing by high debt as of now."
    },
    {
      "heading": "Employment and structural policy priorities",
      "content": "- Accelerating job creation and reducing unemployment is a pressing challenge across the region:\n  - Middle-income countries: high levels of visible unemployment.\n  - Low-income countries: robust output growth is not producing strong growth in wage employment.\n- Policy recommendations to boost employment (tailored to country characteristics):\n  - Amending labor market regulations to reduce disincentives for hiring while maintaining worker protection.\n  - Investing in education systems that deliver workers with the skill sets required by employers.\n  - Revising hiring practices and compensation policies in the public sector to ensure an even playing field.\n  - Improving the business climate to boost employment demand."
    },
    {
      "heading": "Renewed global investor interest and sovereign bond access",
      "content": "- Sub-Saharan Africa’s access to international sovereign bond markets has grown significantly, reflecting easy global financial conditions and the region’s favorable economic prospects.\n- Recent sovereign bond market developments cited:\n  - Zambia’s debut Eurobond in September 2012 was massively oversubscribed and priced below Spain’s 10-year bond at the time.\n  - Tanzania tapped global capital markets at end-February 2013.\n  - Rwanda did the same just last month.\n- Opportunities and risks from increased access to global capital markets:\n  - Recommendations for countries accessing these markets:\n    - Maintain prudent fiscal policies that safeguard long-term sustainability.\n    - Consider bond issues against a range of financing instruments under an appropriate medium-term debt management strategy.\n    - Follow best practices to get the best possible access terms.\n  - Note: International sovereign bonds may not be the best option for financing infrastructure investment; other funding options may provide more tailored and cost-effective financing.\n\nArticle author: Antoinette M. Sayeh; June 10, 2013\n\n---\n\n\n References\n\n- Regional Economic Outlook\n\nSource: https://www.imf.org/en/blogs/articles/2013/06/10/africa-second-fastest-growing-region-in-the-world"
    }
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    "Authors: Antoinette M Sayeh",
    "Published: June 10, 2013",
    "Sub-Saharan Africa is the second fastest-growing region of the world today, trailing only developing Asia.",
    "In 2012, Sub-Saharan Africa maintained solid growth, with output growth at 5 percent on average.",
    "Key factors supporting the region through the Great Recession and into 2012:",
    "Dynamic sectors in many countries:",
    "The region has seen growth at two different speeds:",
    "One-off and country-specific supports expected to bolster growth in some countries:",
    "Two-speed growth expected to persist for the next few years:",
    "Inflation outlook:",
    "The latest Regional Economic Outlook projects a broadly positive near future for the region, with a moderate acceleration of growth expected in 2013–14.",
    "Risk scenario analysis indicates adverse global shocks would affect sub-Saharan Africa’s growth, but not derail it.",
    "Countries with limited policy buffers and a narrow export base could experience more severe adverse effects.",
    "External downside risks identified:",
    "Domestic risks identified:",
    "The region’s positive outlook is conditional on implementing sound economic policies; priority short-run policy actions to contain or prevent imbalances include:",
    "Rebuilding buffers to handle external shocks remains a priority in many fast-growing countries:",
    "Accelerating job creation and reducing unemployment is a pressing challenge across the region:",
    "Policy recommendations to boost employment (tailored to country characteristics):",
    "Sub-Saharan Africa’s access to international sovereign bond markets has grown significantly, reflecting easy global financial conditions and the region’s favorable economic prospects.",
    "Recent sovereign bond market developments cited:",
    "Opportunities and risks from increased access to global capital markets:",
    "[Regional Economic Outlook](http://www.imf.org/external/pubs/ft/reo/2013/afr/eng/sreo0513.htm)"
  ],
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