## Sub-Saharan Africa: Restarting the Growth Engine

_IMF News, May 9, 2017_

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## Bibliographic details
- Published: May 9, 2017

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### Growth performance and outlook
- Average growth slowed to 1.4 percent in 2016, the lowest in more than 20 years.
- A modest recovery to 2.6 percent is expected in 2017.
- These outcomes remain well short of past trends of 5-6 percent and would barely exceed population growth at current rates.
- Some countries (Senegal, Kenya) continue to experience growth rates higher than 6 percent.

### Causes of the slowdown and emerging vulnerabilities
- Commodity price shock: many countries, notably commodity exporters and oil exporters such as Angola, Nigeria, and the countries of the Central African Economic and Monetary Union (CEMAC), suffered substantial commodity price shocks.
- Insufficient policy adjustment: delays in implementing critical adjustment policies have led to higher public debt, uncertainty, and reduced investment, increasing the risk of deeper future difficulties.
- Non-commodity vulnerabilities: countries with limited commodity reliance (Cote d’Ivoire, Kenya, Senegal) have maintained high growth but carry high fiscal deficits, leading to rising public debt and borrowing costs.
- External environment: recent improvements offer limited support; oil prices projected to stay far below their 2013 peaks.
- Financing costs: financing costs for frontier economies in the region remain higher than for other emerging markets and could tighten further amid fiscal easing and U.S. monetary policy normalization.
- Weather, pests, and conflict: drought and pest infestations are raising food insecurity in parts of southern and eastern Africa; famine has been declared in South Sudan and is looming in northeastern Nigeria due to conflicts.

### Policy priorities to restart the growth engine
- Priority 1 — Macroeconomic stability
  - Renewed focus on macroeconomic stability to set the stage for growth turnaround.
  - For hardest-hit countries, fiscal consolidation is urgently needed to halt reserve declines and offset budgetary revenue losses, especially in the CEMAC.
  - Where available, greater exchange rate flexibility and elimination of exchange restrictions to help absorb shocks.
  - For countries with still-strong growth, address emerging vulnerabilities from a position of strength.
- Priority 2 — Structural reforms to support rebalancing
  - Implement structural measures to ensure a sustainable fiscal position and durable growth.
  - Improve tax collection, strengthen financial supervision, and address longstanding business climate weaknesses that impede economic diversification.
- Priority 3 — Strengthen social protection
  - Reinforce social protection for the most vulnerable to prevent reversal of recent poverty-alleviation gains.
  - Current social protection programs are often fragmented, not well-targeted, and cover a small share of the population.
  - Reallocate savings from expansive and untargeted schemes (such as fuel subsidies) toward helping vulnerable groups.

### Additional analysis in the Regional Economic Outlook
- Two background studies examine:
  - The region’s experience with episodes of sustained growth and their drivers.
  - The role of the informal sector in sub-Saharan Africa.

*Source: Sub-Saharan Africa: Restarting the Growth Engine, IMF Country Focus, May 9, 2017.*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [IMF Country Focus](https://www.imf.org/en/news/country-focus)
- [Read the report](https://www.imf.org/en/publications/reo/ssa/issues/2017/05/03/sreo0517)
- [Press Release](https://www.imf.org/en/news/articles/2017/05/09/pr17152-imf-calls-for-strong-sound-policy-measures-to-restart-sub-saharan-africa-growth-engine)
- [Listen to the podcast](http://www.imf.org/external/pubs/ft/survey/so/SinglePodcastHighlight.aspx?podcastid=446)
- [Regional Economic Outlook for Sub-Saharan Africa](http://www.imf.org/en/Publications/REO/SSA/Issues/2017/05/03/sreo0517)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/05/05/na050917-sub-saharan-africa-restarting-the-growth-engine_