Regional Economic Outlook: Sub-Saharan Africa
Sub-Saharan Africa, May 9, 2017
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- Published: May 9, 2017
- Series: Sub-Saharan Africa
Overview and recent performance
- Growth momentum in sub-Saharan Africa remains fragile, marking a break from the rapid expansion witnessed since the turn of the millennium.
- 2016 was a difficult year for many countries, with regional growth dipping to 1.4 percent—the lowest level of growth in more than two decades.
- Most oil exporters were in recession, and conditions in other resource-intensive countries remained difficult.
- Other nonresource-intensive countries however, continued to grow robustly.
- The deterioration in the overall outlook partly reflects insufficient policy adjustment.
Growth outlook and drivers (short-term)
- A modest recovery in growth of about 2.6 percent is expected in 2017, but this falls short of past trends and is too low to put sub-Saharan Africa back on a path of rising living standards.
- The modest rebound in 2017 will be to a large extent driven by one-off factors in the three largest countries:
- a recovery in oil production in Nigeria,
- higher public spending ahead of the elections in Angola,
- the fading of drought effects in South Africa,
- combined in all three countries with modest improvements in the terms of trade.
- At this rate, growth for the region as a whole will continue to fall well short of past trends and barely deliver any per capita gains.
Cross-country heterogeneity and scope of slowdown
- About two-thirds of the countries in the region, together accounting for 83 percent of the region’s GDP, slowed down in 2016—although some countries still continued to expand strongly.
- After nearly two decades of strong growth, average economic activity in sub-Saharan Africa has decelerated sharply, against the backdrop of lower commodity prices, a less-supportive global environment, and, in the hardest-hit countries, a delayed policy response.
Policy implications and priorities
- Strong and sound domestic policy measures are needed to restart the growth engine.
- Two related policy questions highlighted:
- How can growth be revived in the hardest-hit countries?
- For countries that are still growing fast, how can growth be sustained?
The informal economy: size, implications, and challenges
- The informal economy is a key component of most economies in sub-Saharan Africa:
- contributing between 25 and 65 percent of GDP,
- accounting for between 30 and 90 percent of total nonagricultural employment.
- While international experience indicates that the share of the informal economy declines as the level of development increases, most economies in sub-Saharan Africa are likely to have large informal sectors for many years to come, presenting both opportunities and challenges for policymakers.
International Monetary Fund — Regional Economic Outlook: Sub-Saharan Africa (canonical URL provided).
Content in this bundle
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
- Regional Economic Outlook: Sub-Saharan Africa Restarting the Growth Engine
References
- Angola and the IMF
- Nigeria and the IMF
- South Africa and the IMF
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