{ "title": "For Africa, Good Policies Bring Good Prospects", "publication": "IMF Blog, April 24, 2014", "sourceUrl": "https://www.imf.org/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects", "canonical": "https://www.imf.org/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects", "overlayPath": "/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/index.md", "summary": "Growth in the region is set to pick up to 5½ percent in 2014 compared to 4.9 percent last year.", "sections": [ { "heading": "Growth outlook and drivers", "content": "- Growth in the region is set to pick up to 5½ percent in 2014 compared to 4.9 percent last year.\n- Growth momentum over the medium term can continue if countries rise to new challenges and manage their economies as dexterously as they have over the past decade.\n- Key drivers:\n - Good macroeconomic policies in the region.\n - Investment in infrastructure and mining.\n - Strong agricultural output.\n - Favorable global tailwinds—high demand for commodities and low interest rates.\n- External support highlights:\n - China has been a major source of foreign direct investment and infrastructure financing for Africa." }, { "heading": "Downside risks to the outlook", "content": "- Export demand risk:\n - If growth in emerging markets slows considerably, export demand will decline, especially for base metals such as copper and iron ore.\n - Countries particularly exposed: Democratic Republic of Congo, Liberia, and Zambia.\n - Tighter financial conditions in China could reduce the appetite for Chinese companies investing abroad.\n- Global financial conditions:\n - As advanced economies unwind highly accommodative monetary policies, global financial conditions will tighten.\n - Sub-Saharan Africa could experience a hike in interest rates and a slowdown, or even a reversal, of private capital flows.\n- Security-related risks:\n - Conflicts in the Central African Republic and South Sudan are exacting a heavy human and economic toll and creating negative spillovers for neighboring countries through lower trade flows and higher security outlays.\n- Fiscal risks:\n - High fiscal deficits in some countries threaten sustainability and could amplify vulnerability to shocks." }, { "heading": "Warning signs: fiscal imbalances and history", "content": "- Policy context:\n - In 2009 many countries mitigated the global crisis using countercyclical fiscal policy or avoiding fiscal procyclicality, maintaining spending when revenue fell.\n- Recent fiscal patterns:\n - In the years preceding the crisis (2004–08), the region saw a fiscal surplus that averaged about 2 percent of GDP.\n - Between 2010 and 2013, the average fiscal deficit amounts to some 3 percent of GDP, a deterioration of 5 percentage points compared with pre-crisis levels.\n- Debt levels:\n - Overall public debt-to-GDP ratios declined from a regional average of 37 percent in 2004–08 to some 33 percent in 2010–13.\n - Debt burdens have been kept in check by relatively high GDP growth rates.\n- Concerns:\n - Continued weakening fiscal positions and rapidly rising debt in some countries, especially those reliant on portfolio flows, increase vulnerability to shocks." }, { "heading": "Higher-quality spending and fiscal trade-offs", "content": "- Much of the increased spending reflects boosts to public investment and pro-poor spending in health, education, and infrastructure.\n- Rationale:\n - The Heavily Indebted Poor Countries Initiative was designed to give fiscal space for socially useful spending and rebuilding infrastructure.\n - Over the long run, higher investment in human capital and infrastructure should raise potential growth sufficiently to pay off debt, assuming spending quality is high.\n- Fiscal judgment:\n - Deficits of the order of 2–3 percent of GDP are probably not a bad thing and will not lead to rising debt burdens given higher GDP growth rates.\n- Targeted concern:\n - Countries depending heavily on portfolio flows to finance deficits are particularly vulnerable and need to put their fiscal house in order." }, { "heading": "Preparing for future shocks — policy recommendations", "content": "- Strengthen resilience to shocks by:\n - Boosting the revenue base.\n - Avoiding excessive spending growth.\n - Intensifying efforts to bring public finances on a more sustainable path in countries with large fiscal deficits and high or rapidly rising debt levels.\n - Fast-growing countries should take advantage of growth momentum to strengthen fiscal balances.\n - Improve the quality and efficiency of public spending across all countries.\n- Leverage existing strengths:\n - Make use of current favorable conditions (“make hay while the sun shines”) to rebuild fiscal buffers and reduce vulnerability.\n\nSource: Antoinette M. Sayeh, April 24, 2014.\n\n---\n\n Content in this bundle\n\n- Regional Economic Outlook: Sub-Saharan Africa -Fostering Durable and Inclusive Growth, April 2014\n - Regional Economic Outlook: Sub-Saharan Africa -Fostering Durable and Inclusive Growth, April 2014 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Regional Economic Outlook: Sub-Saharan Africa -Fostering Durable and Inclusive Growth, April 2014 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/wp-content/uploads/2014/04/afrchapter11.jpg\n- https://www.imf.org/wp-content/uploads/2014/04/afrchapter12new.jpg\n- https://www.imf.org/wp-content/uploads/2014/04/afrchapter13.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/index.md)", "[Structured JSON version](/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/index.json)", "[Bundle manifest](/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/bundle-manifest.json)", "Authors: Antoinette M Sayeh", "Published: April 24, 2014", "Growth in the region is set to pick up to 5½ percent in 2014 compared to 4.9 percent last year.", "Growth momentum over the medium term can continue if countries rise to new challenges and manage their economies as dexterously as they have over the past decade.", "Key drivers:", "External support highlights:", "Export demand risk:", "Global financial conditions:", "Security-related risks:", "Fiscal risks:", "Policy context:", "Recent fiscal patterns:", "Debt levels:", "Concerns:", "Much of the increased spending reflects boosts to public investment and pro-poor spending in health, education, and infrastructure.", "Rationale:", "Fiscal judgment:", "Targeted concern:", "Strengthen resilience to shocks by:", "Leverage existing strengths:", "**Regional Economic Outlook: Sub-Saharan Africa -Fostering Durable and Inclusive Growth, April 2014**", "[https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_1.jpg](https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_1.jpg)", "[https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_2_new.jpg](https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_2_new.jpg)", "[https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_3.jpg](https://www.imf.org/wp-content/uploads/2014/04/afr_chapter1_3.jpg)" ], "related": [ { "title": "Regional Economic Outlook: Sub-Saharan Africa -Fostering Durable and Inclusive Growth, April 2014", "role": "document", "sourceUrl": "http://www.imf.org/external/pubs/ft/reo/2014/afr/eng/sreo0414.pdf", "summary": { "path": "/external/pubs/ft/reo/2014/afr/eng/sreo0414.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/external/pubs/ft/reo/2014/afr/eng/sreo0414.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/index.md", "json": "/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/index.json", "bundleManifest": "/en/blogs/articles/2014/04/24/for-africa-good-policies-bring-good-prospects/bundle-manifest.json" }, "generatedAtUtc": "2026-08-28T02:22:43.197Z" }