Restarting the Growth Engine in Sub-Saharan Africa
IMF Blog, May 19, 2017
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- Authors: The Editors
- Published: May 19, 2017
Key findings on recent economic performance
- The IMF’s latest economic health check shows that growth "fell to its lowest level in 20 years."
- The region’s average growth for 2016 "has reached only 1.4 percent, the weakest performance in more than two decades, and well below the region’s population growth."
- The two-decade long run of "5 to 6 percent" growth came to a halt.
- Severe drought and resulting crop infestation contributed to a famine "affecting some 20 million people."
- Some larger economies in Western and Eastern Africa—Côte d'Ivoire, Ethiopia, Kenya, Senegal, and Tanzania—are still growing at "robust rates of 5 to 7 percent."
Main drivers of the slowdown (as identified)
- Lower commodity prices.
- Severe drought, exacerbating crop infestation and leading to famine impacting "some 20 million people."
- Political conflicts that affect trade.
Three policy pillars recommended to revive growth
- Renew focus on debt reduction, employ fiscal policy to raise domestic revenues, and greater exchange rate flexibility.
- Renew emphasis on economic diversification, and improving the business climate so that the private sector can feel confident to invest.
- Pay attention to providing social safety nets to protect the most vulnerable in society.
Medium‑term outlook and caveats
- "In the medium term, there are no reasons why growth in sub-Saharan Africa should not be very strong," reflecting the region’s "young and growing" population and large aspirations.
- The region remains less integrated in trade than other regions, which "might cushion the region in the event of a shift towards more inward-looking policies across the globe," but it is "not immune to global developments."
- Frontier market economies in the region "have tapped international markets," which "widens the sources of financing but makes those countries more sensitive to the global environment."
Additional context and publication metadata
- Publication date: May 19, 2017.
- Attribution in text: The IMF African Department’s Celine Allard oversaw the report and is cited in the podcast.
- Institutional context: The IMF is "an organization of 191 countries" based in Washington D.C.
- Related IMF outputs referenced: IMF’s 2017 Regional Economic Outlook for Sub-Saharan Africa and World Economic Outlook; podcast available in English and French.
Source: IMFBlog — "Restarting the Growth Engine in Sub-Saharan Africa" (May 19, 2017).